Editor’s Note: LoganSquarist staff writer Emily Wessel Farr is owner and partner at Ardent Law in Logan Square. She will be contributing a monthly column on legal matters.
I have a riddle for you.
What do you call a technology company that acts as a conduit between transportation providers and passengers, but is not, itself, a transportation company?
That’s Uber’s description of what it does. If you thought Uber did transportation, you’re not alone. After all, Uber advertises “Your ride, on demand.” For those who use its service (read: everyone), Uber is the Morgan Freeman to our Jessica Tandy, the Mom to our 8th grade awkwardness. Uber drives us. When we Uber, we’re going somewhere. Sure, it’s a cool app –because it magically plucks us off the street and into our homes. Uber is technology and transportation. In fact, without the transportation part, it would be very strange to use Uber:
“Gee, Kevin, why are you standing alone on Milwaukee and Fullerton at 1:15 a.m.?”
“Just watching this technology show me little cars doing crazy right angles. Aren’t they cute?”
Since Kevin doesn’t exist as a consumer, and companies sort of pay attention to consumer demand, why is Uber underselling itself? Uber has been distancing itself from its workers, as drivers increasingly claim that they are employees of the company. Since the number of independent workers has increased by 12 percent in the past five years, with Millennials making up 30 percent of that force, who should pay for what is a hot topic.
The Perks of Being an Employee, or, How Uber Classifies Workers
Many workers thrive on the flexibility and ownership the gig economy provides. However, there are perks to being an employee, rather than a freelancer or contractor. Actual perks, like healthcare, social security deductions, and unemployment benefits. Laws under the Fair Labor Standards Act (minimum wage, etc.) do not apply to independent contractors.
Employers also avoid liability for the worker’s actions. Recently, an Uber driver who happened to stab his passenger sparked a lawsuit against the company. The case is still in litigation, but the court found that a reasonable juror could find that the driver was an Uber employee.
The classification of a worker affects taxes, too, and the IRS is carefully watching what it deems the growing “misclassification” of workers. New guidelines from the Department of Labor warn employers: if your workers look like employees, err on classifying them as such.
The key analysis is this: Is the worker economically dependent on the company for her livelihood, or is she truly in business for herself? Under this test, we can expect the courts to classify some gig workers as employees. After all, many of them depend solely on their gig to make ends meet, and the job functions are often heavily controlled by the company. A class action suit pending in California against Uber will seek to determine whether the company is misclassifying workers.
The Uber cases will signal what lies ahead for gig workers everywhere – in the meantime, don’t forget to tip your driver, grocery deliverer and errand runner.
Emily Wessel Farr is owner and partner at Ardent Law, LLC, a litigation firm based in Logan Square.
Disclaimer: The above information is provided as general information, not as legal advice, and does not create an attorney client relationship. Before making any decisions regarding legal matters, individuals should consult with a qualified attorney.