The use of independent contractors has long been an issue plaguing workers in California, forcing them to at times work for less than minimum wage and forfeit employee benefits, such as health insurance, while the companies they work for continue to receive tax incentives for classifying these workers as independent contractors. With no clear-cut determination for classification, workers are left facing an uphill battle in challenging their classification.
Last week’s Uber proposed settlement is another case which encourages the use (or misuse) of independent contractors, especially among companies employing the “gig economy” business model. If Uber drivers were classified as employees as opposed to independent contractors, that classification had the potential to alter the valuation of sharing economy businesses who utilize independent contractors, thus forcing change in the way these companies conducted business. Instead, the settlement is nothing more than a slap on the wrist for Uber, and continues to encourage the use of independent contractors in sharing economy businesses, only hurting Uber drivers and other workers classified as such. And how does that affect working men and women throughout California?
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