California AG, cities bring suit against Uber and Lyft over worker classification News
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California AG, cities bring suit against Uber and Lyft over worker classification

California Attorney General Xavier Becerra, along with attorneys from three of the state’s largest cities, filed a lawsuit Tuesday against Uber Technologies Inc. and Lyft Inc. claiming their misclassification of workers as independent contractors violates state law and places a burden on California taxpayers.

The suit, filed by Becerra and city attorneys for San Francisco, Los Angeles and San Diego in the Superior Court of San Francisco, alleges that Uber and Lyft made the “calculated business decision to misclassify their on-demand drivers as independent contractors rather than employees.”

That misclassification, the state of California as plaintiff argues, not only deprives the drivers of their rights to protections such as minimum wage, insurance and sick leave, but has placed a burden on California taxpayers who end up covering the workers via tax dollars.

The “massive, unlawful employee misclassification schemes” are also, the complaint outlines, in violation of California Assembly Bill 5 (AB5), which presumes that California workers are generally employees (versus independent contractors) entitled to protection under the state’s Wage Orders, Labor Code, and Unemployment Insurance Code unless proven otherwise using a three-factor test.

In a press release from the California Attorney General’s office, Becerra, the attorneys for each city, along with Assemblywoman Lorena Gonzalez, author of AB 5, outlined their claim against Uber and Lyft’s misclassification of workers in light of the current COVID-19 crisis:

With jobless claims skyrocketing during the COVID-19 public health crisis, the vulnerability of Uber’s and Lyft’s drivers has become more apparent than ever. The companies deny that their drivers are entitled to state unemployment insurance, as well as state-mandated paid sick leave and other employee benefits. The companies are thereby shirking their obligations to their workforce and shifting the burden onto drivers and taxpayers at a time when they are most vulnerable.

According to Reuters, Uber and Lyft both responded with their own statements Tuesday; Uber by offering that instead of California’s view of protecting workers (via the suit), in the current time of crisis the focus should be on the “need to make it easier, not harder, for people to quickly start earning,” while Lyft’s response expressed intent to work with California cities to ensure as many workers receive the benefits of the state economy.