uber.jpgUber, the car service that’s sweeping the globe, is facing one of the biggest challenges of its young life but workers everywhere should take notice, not just Wall Street.

A California court recently deemed one of its drivers an employee and not an independent contractor, and that means the driver may now be eligible for everything from minimum wage to expenses reimbursement.

This from a Bloomberg article on the ruling:

The ruling by the agency headed by Commissioner Julie Su, an appointee of Governor Jerry Brown, was filed in San Francisco state court Tuesday. It stemmed from a wage and reimbursement dispute.

“The defendants hold themselves out as nothing more than a neutral technological platform, designed simply to enable drivers and passengers to transact the business of transportation,” the commission said in the decision, filed alongside Uber’s appeal notice. “The reality, however, is that defendants are involved in every aspect of the operation.”

Indeed, when you look at who is legally deemed an employee not just in California, but according to federal statutes, Uber, and other similar firms, seem to be utilizing workers as if they were employees but calling them contractors.

The growing use of independent contractors has been a concern among many labor advocates who see this business model and mainly as a way for companies to get out of basic state and federal labor laws. Former Labor Secretary Robert Reich calls it the “Share-the-Scraps Economy.”

How would you like to live in an economy where robots do everything that can be predictably programmed in advance, and almost all profits go to the robots’ owners?

Meanwhile, human beings do the work that’s unpredictable – odd jobs, on-call projects, fetching and fixing, driving and delivering, tiny tasks needed at any and all hours – and patch together barely enough to live on.

Brace yourself. This is the economy we’re now barreling toward.

They’re Uber drivers, Instacart shoppers, and Airbnb hosts. They include Taskrabbit jobbers, Upcounsel’s on-demand attorneys, and Healthtap’s on-line doctors.

They’re Mechanical Turks.

To find out if you’re actually a mechanical turk and not an actual employee you need to know your rights.

Here’s an excerpt of a fact sheet from the Department of Labor’ Wage and Hour division that breaks down who’s considered an employee:

1) The extent to which the work performed is an integral part of the employer’s
business. If the work performed by a worker is integral to the employer’s business, it is more
likely that the worker is economically dependent on the employer and less likely that the worker is
in business for himself or herself. For example, work is integral to the employer’s business if it is a
part of its production process or if it is a service that the employer is in business to provide.

2) Whether the worker’s managerial skills affect his or her opportunity for profit and
loss. Managerial skill may be indicated by the hiring and supervision of workers or by investment
in equipment. Analysis of this factor should focus on whether the worker exercises managerial
skills and, if so, whether those skills affect that worker’s opportunity for both profit and loss.

3) The relative investments in facilities and equipment by the worker and the
employer. The worker must make some investment compared to the employer’s investment (and
bear some risk for a loss) in order for there to be an indication that he/she is an independent
contractor in business for himself or herself. A worker’s investment in tools and equipment to
perform the work does not necessarily indicate independent contractor status, because such tools
and equipment may simply be required to perform the work for the employer. If a worker’s
business investment compares favorably enough to the employer’s that they appear to be sharing
risk of loss, this factor indicates that the worker may be an independent contractor.

4) The worker’s skill and initiative. Both employees and independent contractors may be
skilled workers. To indicate possible independent contractor status, the worker’s skills should
demonstrate that he or she exercises independent business judgment. Further, the fact that a
worker is in open market competition with others would suggest independent contractor status.
For example, specialized skills possessed by carpenters, construction workers, and electricians are
not themselves indicative of independent contractor status; rather, it is whether these workers
take initiative to operate as independent businesses, as opposed to being economically
dependent, that suggests independent contractor status.

5) The permanency of the worker’s relationship with the employer. Permanency or
indefiniteness in the worker’s relationship with the employer suggests that the worker is an
employee, as opposed to an independent contractor. However, a worker’s lack of a permanent
relationship with the employer does not necessarily suggest independent contractor status
because the impermanent relationship may be due to industry-specific factors, or the fact that an
employer routinely uses staffing agencies.

6) The nature and degree of control by the employer. Analysis of this factor includes who
sets pay amounts and work hours and who determines how the work is performed, as well as
whether the worker is free to work for others and hire helpers. An independent contractor
generally works free from control by the employer (or anyone else, including the employer’s
clients). This is a complex factor that warrants careful review because both employees and
independent contractors can have work situations that include minimal control by the employer.
However, this factor does not hold any greater weight than the other factors. For example, a
worker’s control of his or her own work hours is not necessarily indicative of independent
contractor status; instead, the worker must control meaningful aspects of the working
relationship. Further, the mere fact that a worker works from home or offsite is not indicative of
independent contractor status because the employer may exercise substantial control over the
working relationship even if it exercises less day-to-day control over the employee’s work at the
remote worksite.

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