Recently, rideshare giants Uber and Lyft have been in the news over a employee classification battle in California. Across the country, Uber and Lyft have always considered their drivers to be independent contractors. But that may have to change.
A California appeals court recently ruled that both companies are likely violating state labor law by failing to classify drivers as employees. While this ruling doesn’t impact Ohio drivers, it highlights the importance of classifying workers as either independent contractors or employees.
Why it matters
Businesses have a huge financial incentive to classify workers as contractors. By doing so, they don’t have to provide a host of benefits and protections – including workers’ compensation benefits if the worker gets injured on the job. If an independent contractor get injured, they’re on their own. That’s a big risk for workers as medical bills, rehabilitation costs combined with the loss of wages can be financially crippling without the assistance of workers’ compensation benefits.
What about Ohio?
The California ruling was based on a new state law that makes it much harder for businesses to classify gig workers as independent contractors rather than employees. (Uber and Lyft have challenged the law in a separate lawsuit and ballot measure.)
Ohio law isn’t as broad in its scope. Instead, it looks at numerous factors to gauge how much control the employer has over the worker. Generally, the more control, the more likely they’re classified as an employee rather than an independent contractor.
How it impacts workers’ comp
Employee misclassification refers to wrongly classifying employees as independent contractors to avoid providing workers’ comp (and other benefits). It’s a rampant problem not just in California, but nationwide.
If you were injured on the job, and your employer claims that you’re an independent contractor, check with a workers’ compensation attorney to ensure that you’re not wrongly classified. Attorneys often uncover misclassifications among injured workers who, it turns out, are entitled to workers’ compensation benefits.