In a recent ruling, the National Labor Relations Board (NLRB) has ruled that Uber drivers, and other ride-share drivers working for companies like Lyft, are independent contractors rather than employees. This means they do not have the right to unionize and are not afforded many of the legal protections they would receive if they were considered employees. Uber considers this ruling a major victory, as most of their workforce are drivers working under ride-share agreements, and their financial and legal obligations would have substantially increased if their drivers were ruled to be employees instead.
Under federal law, there are two primary kinds of workers: employees and independent contractors. In general, employees are workers that the company has control over and is, thus, responsible for, while independent contractors are not under the company’s control and, thus, not the company’s responsibility. Employees are protected by the National Labor Relations Act, which gives the NLRB its authority, while independent contractors are not. While there are no hard rules about what makes someone qualify as an employee versus an independent contractor, there is a list of ten criteria that the NLRB uses to evaluate a particular worker’s activities and duties, and determine whether those meet enough criteria for that worker to qualify as an employee.
Those criteria include, among other things:
- The extent to which the worker’s activities are a principal part of the employer’s business
- The length and permanency of the working relationship
- The amount of the worker’s personal investment in facilities or equipment
- The nature and degree of control by the employer
- The worker’s opportunity for additional business outside of their relationship with the employer
- The degree to which the worker must compete with others on the open market for business
- The degree to which the worker must independently organize and operate their own business activities
In looking at these factors, the NLRB took into consideration certain facts related to how Uber drivers function in their day-to-day business. For example, the fact that Uber drivers own their own cars and can dictate their own hours through the ride-sharing app tended to point to them being independent contractors. On the other hand, the fact that Uber drivers are integral to Uber’s business tended to point to them being employees. The fee arrangement, where Uber takes some of the driver’s fare in exchange for linking the driver and the passenger, was seen as a neutral factor, because even though it was seen as akin to a commission (usually seen in employee relationships), the fact that Uber drivers can charge more during periods during high demand was seen as closer to an independent contractor model. In the end, weighing all the factors, the NLRB came out on the side of Uber drivers being independent contractors, not employees.
If you are in a dispute with your employer over your employment status or want to protect your rights as an employee or independent contractor, give the Law Offices of Steve Sack a call. Steven Mitchell Sack, the Employee’s Lawyer, is a New York employment lawyer who has considerable experience in handling the many aspects of employment law, including overtime, tips and gratuities, minimum wage, unemployment benefits, and disability matters. To schedule a consultation with New York City employment lawyer Steve Mitchell Sack, call (917) 371-8000.
