Gig Economy Business Model Dealt a Blow in California Ruling

Elias Hubbard
May 2, 2018

Companies in California that hire independent contractors will have to prove those workers are running their own enterprises to avoid complying with states laws that govern employment, according to a state Supreme Court ruling Monday that could work in favor of those working gig economy jobs. The decision is seen as a victory for labor advocates and will likely mean that more workers in California are eligible for minimum wage, rest breaks and other benefits, AP reported. "It's a massive thing-definitely a game-changer that will force everyone to take a fresh look at the whole issue", is another collected by the New York Times.

Michael Rubin, who represented labor unions that argued on behalf of Dynamex drivers, said the court adopted "the most worker protective standard available". Visit MarketWatch.com for more information on this news.

The ruling came in a case originally filed in Los Angeles County Superior Court by a worker, Charles Lee, claiming that the West Coast operations of Dallas delivery company Dynamex Inc. improperly classified him as an independent contractor.

As an example, the court said a plumber hired by a retail store to fix a bathroom leak is not performing work that is part of the store's usual business. But seamstresses sewing at home using materials provided by a clothing manufacturer would probably be considered employees.

(C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed. Without a specific court ruling on whether its workers are employees, Uber won't be counting them that way anytime soon.

Where do Uber drivers fall?

The case on which the court ruled Monday was brought by delivery drivers at a company called Dynamex, who had been considered employees before 2004, when the company changed the relationship to a contracting arrangement. They could simply make their workers employees rather than contactors.

Other reports by Click Lancashire

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