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California Labor Commission Ruling Opens Discussion Over the Differences Between Contract and Full-Time Employees


Commission rules in favor of contract worker in wage and benefit dispute

The divide between contractors and direct employees grew narrower recently after a ruling by the California Labor Commission. The ruling defines Uber as an employer, rather than the app service they have previously claimed to be. For those unfamiliar with Uber, the organization has grown increasingly prominent in the ride-sharing sector. The Uber app connects individuals in need of transportation with Uber drivers in their area. The passenger is able to select a driver and pays the driver a fare for the ride.

To this point, Uber had classified its drivers as contractors, rather than full-time employees of the organization. Uber has also claimed that it has no control over the hours or schedules worked by its drivers. Using this reasoning, Uber has declined overtime pay, expenses and other benefits it reserves for full-time employees.

The California ruling strikes down that position, albeit in a single instance. The ruling comes on the heels of a wage complaint from Uber driver Barbara Berwick, who claimed that the organization had denied her compensation for hours worked and operating expenses she felt entitled to. The California Commission agreed, ordering Uber to pay Berwick more than $4,000 in wages and expenses for her time as a driver.

The slippery slope of contractor versus employee

Many employers rely on contract employees to fill specific roles, manage short-term projects or provide expertise otherwise unfound in the organization. The practice of hiring contractors can be beneficial for both parties, as the employer is able to save some costs of benefits and the employee receives a paycheck for his or her services.

The Uber ruling signals a shift in thinking when it comes to the difference between contract and full-time employee. On the heels of the ruling, more organizations are sure to review their policies regarding contract and full-time employee hiring process, the wages each is paid and the benefits each group is offered.

Gone are the days of employers hiring contractors, utilizing them as full-time employees and declining to pay them benefits reserved for direct hires. As more of these wage and benefit disputes come to light, the position of contractors in the workplace is likely to change.

The assistance of a New York employment lawyer may help when the lines between contractor and employee become blurry

If you have encountered a complex situation involving wage or benefit disputes, the guidance of an experienced New York employment lawyer may help. At Hepworth, Gershbaum & Roth, our New York employment law attorneys leverage more than 70 years of experience to help employees and employers translate wage and benefits laws and apply them to each unique situation.

Contact us online or call 212-545-1199 to discuss your case during a free consultation with one of our New York employment law attorneys.




Contact an employment law attorney in New York today for a free initial consultation and determine whether you have a case. For a free initial consultation, you can contact us online or by phone.

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