Employee or Independent Contractor? Uber, Lyft Driver Saga Highlights the Difference

Many workers enjoy several important rights and protections on the job, including those under state and federal law that ban various forms of discrimination and require that employees be paid minimum wages and overtime.

But a growing group of workers across a wide range of industries is increasingly being carved out from these rights and protections. That is because companies are classifying those workers as “independent contractors” instead of “employees.” 

The battle raging over Uber and Lyft’s treatment of rideshare drivers connected to customers through the apps as contractors has put a spotlight on how that classification waters down workers’ rights. Still, the shift away from traditional employee status extends far beyond the gig economy, impacting everyone from home care providers to long-haul truckers.  

“The debate over the misclassification of employees — treating them as independent contractors instead of employees — pervades the modern fissured workplace,” Dr. David Weil, who ran the U.S. Labor Department’s Wage and Hour Administration during the Obama administration, writes in Harvard Business Review.

Here is why it matters: If you are classified as an independent contractor, you are generally treated as a self-employed entrepreneur. That means you are essentially on your own when it comes to pay, benefits and protections.

Contractors are not entitled to minimum wages and overtime pay, are not protected by anti-discrimination laws, and (probably) do not have the right to join a union. They are also not eligible for workers’ compensation if they get hurt on the job and generally not able to get unemployment insurance benefits if work dries up. Although a contractor can write off certain business expenses for tax purposes, the person is on the hook for both the employer and the employee share of payroll taxes.

The problem is that many workers who should be employees are incorrectly classified as independent contractors. The good news is that there are a number of legal tools that workers can use to challenge their status and seek unpaid minimum wages and overtime. It is vital to have a seasoned wage and hour attorney in your corner.

Maryland employment attorney Jamaal “Jay” W. Stafford has significant experience helping people across the state fight misclassification and recover unpaid wages. He has a strong track record of success in the courtroom and through negotiated settlements. 

Uber, Lyft in the Hot Seat

Uber and Lyft have been in the eye of a storm over their treatment of drivers since the companies launched over a decade ago. Driver classification requirements vary from state to state (and often depend on which law you are trying to enforce). The distinction between a contractor and an employee often comes down to who controls the work and how central it is to the company’s business.

The rideshare companies are threatening to stop operating in California after a judge ruled that they are required to classify drivers as employees. They are also part of a group spending $110 million to try to get the state’s new worker classification law overturned through a ballot initiative in November.

The debate is not limited to the Golden State. Uber and Lyft face lawsuits over drivers’ contractor status across the country, from Massachusetts to Oregon. Uber is also facing a $650 million payroll tax bill in New Jersey, where state officials say the company owes them for taxes Uber would have paid if they had properly classified drivers as employees.

But it is not just Uber and Lyft drivers whose rights are at stake. Anyone who has been misclassified as an independent contractor has the right to take legal action. Expedia travel agents and Bob’s furniture deliverers are among those who have recently sued their employers for misclassification.

Speak with a Maryland Employment Lawyer Today

Maryland employment lawyer J.W. Stafford helps employees fight for their rights. He works aggressively to ensure that his clients are treated properly by their employers.

To learn more about your workplace rights, whether under federal or Maryland law, make an appointment to speak with a Maryland employment lawyer at the Law Firm of J.W. Stafford. Call us at 410-514-6099 or contact us online.