California Labor Commissioner Sues Uber & Lyft for Wage Theft

 (AP Photo/David Zalubowski)

OAKLAND, Calif. (CN) — Already facing pressure to start classifying drivers as employees in litigation brought by the California attorney general, Uber and Lyft were hit with two more lawsuits from state labor officials Wednesday seeking back wages for drivers.

The California Labor Commissioner filed wage-theft lawsuits against the ride-hail technology giants in Alameda County Superior Court.

“The goal of the lawsuits is to enforce California labor laws and to ensure that drivers are not misclassified as independent contractors,” the Labor Commissioner’s Office said in a statement.

The lawsuits “seek recovery of unpaid wages and other amounts due to all of Uber and Lyft’s California drivers,” including unpaid minimum wage, overtime, rest breaks, reimbursement of car and gas expenses and damages and penalties for violations of state labor laws, according to a letter written by the assistant chief of the Wage Theft Adjudication Unit for the California Department of Industrial Relations.

Any back wages, damages or penalties recovered through the litigation will be distributed to nearly 5,000 drivers who filed wage complaints with the state going back to April 16, 2017, according to the Labor Commissioner’s Office.

The lawsuits also seek to force Uber and Lyft to start classifying their more than 100,000 California drivers as employees as required by the game-changing state labor law that took effect this year – Assembly Bill 5. Another lawsuit filed by California Attorney General Xavier Becerra in May seeks the same relief.

However, the Labor Commissioner’s lawsuit goes one step further in also seeking back wages, reimbursements, penalties and damages for drivers.

In an emailed statement, Uber said it had not yet been served with the lawsuit, but the company insisted that most of its drivers prefer being independent contractors.

“The vast majority of California drivers want to work independently, and we’ve already made significant changes to our app to ensure that remains the case under state law,” Uber said. “When 3 million Californians are without a job, our leaders should be focused on creating work, not trying to shut down an entire industry.”

Lyft did not immediately respond to a request for a comment.

Last year, California passed Assembly Bill 5, which requires companies to classify workers as employees unless they perform work that is “outside the usual course of the hiring entity’s business.”

Uber, Lyft, and other gig companies are supporting a ballot measure, Prop 22, to overturn the new state law this November. Thus far the companies have poured $110 million into the campaign, dwarfing the $1.15 million raised by their opponents.

Assembly Bill 5, signed into law by Governor Gavin Newsom on Sept. 19, 2019, sought to codify the labor standard established by the California Supreme Court in its 2018 ruling in Dynamex v. Superior Court.

To consider workers contractors under that standard, companies must show: they do not directly control the worker, the work done falls outside the company’s usual course of business and the worker is “customarily engaged in an independently established trade.”

During a federal court hearing in April, Uber previewed its new legal strategy for fighting to keep drivers classified as contractors in the face of a much stricter state labor standard. Uber attorney Theane Evangelis of Gibson Dunn & Crutcher said Uber is not the “hiring entity” that employs drivers.

“Who would be the hiring entity?” U.S. District Judge Edward Chen asked.

“The individual consumer who asks for a ride,” Evangelis replied. “It is not Uber who is hiring drivers to perform services for Uber.”

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