California labor commissioner sues Uber and Lyft, alleging wage theft

In its most up-to-date go to acquire gig overall economy organizations to job, California is suing Uber and Lyft for alleged wage theft. The state claims the providers have “willfully” misclassified motorists as impartial contractors rather of staff members, depriving them of primary employee protections and wages.

The lawsuits, brought by California Labor Commissioner Lilia García-Brower, look for to “stop the two companies from misclassifying their motorists and permit the Labor Commissioner to recuperate unpaid wages and other compensation that drivers are entitled to,” according to a post on the labor commissioner’s site Wednesday.

Filed in Alameda County Superior Court docket, the lawsuits request that the court docket order Uber and Lyft to prevent misclassifying their drivers as independent contractors.

Assembly Monthly bill 5, a landmark California employment legislation, ramped up the fight about contractor classification of gig financial system workers. The regulation, which took influence Jan. 1, founded stricter expectations by which workers can be treated as independent contractors somewhat than employees.

Organizations these kinds of as Uber, Lyft and DoorDash have put up a vehement combat towards the laws, pouring thousands and thousands of pounds into a ballot evaluate known as Proposition 22 that would carve out a 3rd classification of do the job for drivers and primarily grant the companies an exemption from AB 5.

“The huge vast majority of California motorists want to do the job independently, and we have previously created major alterations to our application to assure that continues to be the situation beneath condition legislation. When 3 million Californians are devoid of a job, our leaders must be focused on creating get the job done, not striving to shut down an full sector,” Uber spokesman Davis White said in an e mail.

Uber and Lyft frequently say unbiased contractor status is a boon to motorists, who want versatile hrs and have to have the operate. While some surveys have revealed support from drivers for the companies’ stance, lots of have pushed back. Due to the fact February, a lot more than 2,000 California journey-hailing motorists have filed statements from the firms, alleging Uber and Lyft owe them additional than $630 million in wages, costs and damages.

Lyft alleged the state filed the lawsuit in buy to cut down its perform on these wage claims in a reaction Wednesday. “The point out labor company has botched 1000’s of promises. They know they really do not have the potential to method these claims, so they sent them into a lawful abyss, where by they know it will take yrs to solve them,” Lyft spokeswoman Julie Wooden claimed in an e-mail.

The grievance against Uber describes how the firm set up subsidiaries named “Rasier” and “Rasier-CA” to act as intermediaries with motorists. Rasier licenses the technologies from Uber and hires drivers. Employing the subsidiaries as shell providers, Uber improperly promises that drivers on your own are giving on-demand from customers rides, the grievance alleges. The go well with alleges the setup is an “effort to obfuscate the apparent summary that Uber’s drivers are its workers, as a matter of law.”

The two issues note that the California Community Utilities Fee, which regulates Uber and Lyft, claimed in a June 9 choice that experience-hailing business motorists are employees. The satisfies argue that Uber and Lyft have unsuccessful to pay back drivers bare minimum wage, extra time, compensation for rest intervals and business fees, between other damages. The defendants are also liable for civil penalties of at least $10,000 for every single driver who has been misclassified, in accordance to the problems.

The labor commissioner’s announcement of the lawsuits will come 1 day before a listening to on one more point out lawsuit in opposition to Uber and Lyft brought by point out Atty. Gen. Xavier Becerra and the city lawyers of Los Angeles, San Diego and San Francisco in Might. Becerra reported in June that they planned to request a preliminary injunction forcing the organizations to handle motorists as staff members in advance of the scenario proceeds. The hearing is set for arguments on that movement.

The announcement gained wide praise from labor teams this sort of as Rideshare Drivers United and the Transportation Staff Union.

“Labor Commissioner Garcia-Brower is standing up for workers and keeping these businesses accountable,” Transport Staff Union Global President John Samuelson said in a information release. “For years Uber and Lyft have been stealing wages and exploiting each individual authorized loophole they can to avoid spending drivers what they are entitled to. It was shameful just before and it is even a lot more shameful now, through the middle of a pandemic, that we have allowed wealthy companies to get away with this. This lawsuit is an important component of keeping these providers accountable and guarding drivers’ rights.”

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