According to experts, recent changes in the Fair Labor Standards Act (FLSA) could dramatically change the way employers classify and treat employees with issues like overtime, gratuities, and benefits. And one of the biggest catalysts to these changes could be a class action lawsuit against Uber (Douglas O’Connor, et al., v. Uber Technologies, Inc., United States District Court Northern District of California, Case No. CV 13-3826-EMC, 2015). The case, filed this year as a class action lawsuit, could result in major changes for Uber drivers who up until this point were treated as independent contractors.
In recent years, labor rules and regulations have changed dramatically with significant rises in the minimum wage requirements. However, pro-labor advocates insist that the changes have not pushed hard enough on employers who are unwilling to properly compensate workers. That is also why many of them believe the Uber lawsuit is so important.
In this particular case, the plaintiffs are suggesting that the control under which Uber operates effectively makes the drivers employees, rather than independent contractors.
This case could have significant implications not just for drivers, but for many other employees as well. In fact, the regulations from the Department of Labor’s recent proposal could mean that up to five million additional workers could get “time-and-a-half” overtime pay when they were not eligible before. “It’s the hottest area of litigation at the federal level- by far,” says one expert. But others point out that “if new (FLSA) proposals go through, there will be a lot less litigation because anyone paid less than $50,000 will not be exempt from overtime.”
What Happens When Employees Are Misclassified As Independent Contractors?
When companies misclassify workers as an independent contractors, they can be cheated out of many benefits they deserve. Benefits can include overtime pay, vacation pay, health insurance, employer-sponsored retirement plans, and expense reimbursements. You may also be cheated out of unemployment and workers’ compensation benefits.
Classification as an independent contractor or an employee comes down to how much control your employer has over you and the work you perform. Here are some characteristics that typically show up when employees are misclassified as independent contractors:
• Employees should have been given a Form W-2, but were instead given a Form 1099.
• Employees have set work hours, work full time, and/or receive paychecks on a regularly scheduled basis.
• Employees work at employer’s premises, and/or use the employer’s tools (e.g. computers, phones, vehicles, etc …).
• Employees are required to comply with a boss’s instructions about when, where, or how they are to do the work.
• Employees typically receive training for the job skills needed for the company they are working for.
• You work product is not your own and goes to the company when you are done.
If you believe any of these factors apply to you, please contact J. Price McNamara for a complimentary case review.
What Is A Class Action Lawsuit?
A class action, class suit, or representative action is a type of lawsuit where one of the parties is a group of people who are represented collectively by a member of that group.
What Is The Fair Labor Standards Act (FLSA)?
The Fair Labor Standards Act (FLSA) is administered by the Employment Standards Administration’s Wage and Hour Division within the U.S. Department of Labor. Basically, FLSA is a set of legal rules that prescribes standards for the basic minimum wage and overtime pay. FLSA impacts most private and public employment and requires employers to pay at least the federal minimum wage and overtime pay of one-and-one-half-times the regular rate of pay. For nonagricultural employers, it restricts the work hours for children under the age of 16 and stops the employment of children under age 18 for jobs deemed too dangerous. For agricultural operations, it prohibits the employment of children under age 16 during school hours and in certain jobs deemed too dangerous. For more information on FLSA, see the U.S. Department of Labor website at: www.dol.gov/compliance/laws/comp-flsa.htm.
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