A county judge in San Diego ruled on Tuesday last week that the grocery delivery service Instacart has unlawfully misclassified its employees as independent contractors since 2012. This classification has given Instacart an unfair competitive advantage by permitting the company to avoid paying its employees a lawful wage and defer their job-related expenses. By avoiding these costs, it is likely that Instacart has been able to save millions of dollars. Accordingly, the court reasoned that this ruling against Instacart prevented further harm to its employees and the general public.
This ruling is an important first step in enforcing California’s AB5 law, which was enacted in June to regulate companies that hire non-traditional workers in large numbers, like Uber and Lyft. Under the law, the majority of these workers are given employee classification status and accompanying benefits, including worker’s compensation and unionization rights. Although Uber and Postmates sought to escape the law earlier this year, the court held that public interest favored enforcement.
The law, and the ruling in these cases, demonstrate California’s “unapologetically” pro-employee stance. The judge cited clear support for pro-employee policies in all three branches of the Californian government over the last two years, stating that “the handwriting is on the wall.”