US Supreme Court rules Uber and Lyft must classify drivers as employees

Uber and Lyft to drivers to gain employee status

US ridesharing organisations Lyft and Uber will have to identify all drivers as employees and not independent contractors, following on from a ruling by the superior court of the state of California

The court ruled that over 750,000 Uber drivers and over 1.4 million Lyft drivers have been misclassified as independent contractors, violating the Assembly Bill No.5 that came into effect on 1 January 2020. The act ensures that all workers who meet its criteria receive the basic rights and protections guaranteed to employees under Californian law.

The case, which was originally filed on 5 May 2020, by the attorney general of California on behalf of the people of the state of California, ruled that Lyft and Uber will need to pay all drivers the minimum wage, employee compensation, unemployment insurance, sick leave and  family leave.

The court’s ruling comes into effect on 20 August 2020, however, Lyft and Uber are appealing the decision in an attempt to delay the effects of the claim until the November 2020 election, in an attempt to persuade voters to change the law. Uber are also contesting the joint litigation, stating that this should be two separate legal cases.

Ethan Schulman, superior court judge, said: “In the specific context involved here, both the legislature and our supreme court have found that the misclassification of workers as independent contractors deprives them of the panoply of basic rights and protections to which employees are entitled under California law.”