Uber Fined Nearly $650M for Misclassifying Workers
November 15, 2019
“The labor costs of companies like Uber and Lyft could rise by 20 to 30 percent if they were required by regulators or courts to treat drivers as employees, according to industry estimates.” -NY Times
New Jersey says it is “cracking down on employee misclassification because it stifles our work force and inflicts a huge financial toll on our economy.” As noted in a recent DoorDash lawsuit complaint, misclassification of workers as independent contractors has contributed to increasing numbers of Americans living paycheck-to-paycheck. Economist Robert Reich says that this misclassification is “contributing directly to low pay, irregular hours, and job insecurity.”
The state of California recently passed a new law requiring that companies like DoorDash and Lyft treat their workers as independent contractors. DoorDash has pledged $30 million to sponsor a ballot initiative that would overturn the new law.
If the new law went into effect, the gig economy would have to raise many workers pay and reimburse them for mileage expenses under California labor law.