Attorneys at Law

Be Informed.

Be informed.

Uber Drivers – Employees or Independent Contractors?

Over the last century, the American workforce has gone through some fairly dramatic changes. Along the way, numerous state and federal laws have been passed in an effort to protect workers and ensure that they are treated fairly in the workplace. One issue that has remained at the forefront of employment law debates is the distinction between employees and independent contractors. Recently, that very issue was before a California labor commissioner after an Uber driver filed a claim against the company. As more “sharing” industries sprout up around the nation, the distinction between employees and independent contractors will continue to blur.

In case you are unfamiliar with the Uber concept, it is a company that provides car rides to people. Before you assume it is just another taxi service, there are some differences. With Uber, drivers sign up with the company, but then decide when they wish to work, or if they wish to work at all. Uber claims they simply connect riders with drivers. Uber also provides ratings for drivers, however, as well as setting the fare prices a driver may charge. Uber also maintains the ability to “fire” drivers if their ratings are too low. Those ratings are determined by customers, though, not by the company itself, causing Uber to compare the system with eBay’s rating system for sellers. Ultimately, Uber’s profit is based on the company receiving a percentage of the fares (20 percent) charged by the drivers. So does this make the drivers independent contractors or employees? The California labor commissioner came down on the side of “employee”; however, that ruling only applied to the Petitioner in that specific case and under those specific circumstances.

The Uber debate is not limited to Uber, either. In today’s economy more and more companies are offering similar services, such as Postmates (delivers just about anything), Instacart (delivers groceries) and Lyft (another car service). Are the individuals who work for these companies employees or independent contractors? The Internal Revenue Service has an extensive list of factors used to classify a taxpayer as one or the other; however, so do individual state unemployment agencies and workers’ compensation boards. Often, thee criterion used by one agency is not the same as that used by another, meaning you could be classified as an employee by the I.R.S. but as an independent contractor when you try to apply for workers’ compensation. Currently though, there is no universal test that applies in all situations. Therefore, the debate – and often litigation – will likely continue for the foreseeable future.

If you find yourself in the middle of a work-related issue that centers on your status as an employee or independent contractor in Conshohocken, Pennsylvania, it is in your best interest to consult with an experienced employment law attorney immediately. Contact the employment law attorneys at Curley & Rothman, LLC by calling 610-834-8819 today to schedule your free consultation.