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Uber “worker misclassification” still a fight in California

Transportation, delivery companies “most significant perpetrators”

Read the court decision here

 A U.S. appeals court on Monday rejected a bid by Uber and subsidiary Postmates to revive a challenge to a California law, Reuters news agency reported on June 10th.

Rejection of the bid could eventually force the companies to treat drivers as employees rather than independent contractors who are typically less expensive.

An 11-judge panel of the 9th U.S. Circuit Court of Appeals in San Francisco upheld a lower court ruling that said Uber failed to show that the 2020 state law known as AB5 unfairly singled out app-based transportation companies while exempting other industries.

California’s “AB5” law states that:

(A) that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact;

(B) that the worker performs work that is outside the usual course of the hiring entity’s business; and

(C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.”…

“The ABC test places the burden on the hiring entity to establish that a worker is an independent contractor, and the hiring entity’s failure to establish any one of the ABC factors ‘will be sufficient in itself to establish that the worker is an . . . employee’ included in the wage order,” Judge Nguyen wrote in his decision.

In its ruling, the Ninth Circuit said  “there are plausible reasons for treating transportation and delivery referral companies differently from other types of referral companies.”

The California legislature “perceived transportation and delivery companies as the most significant perpetrators of the problem it sought to address — worker misclassification,” Circuit Judge Jacqueline Nguyen wrote.

Uber said in a statement on Monday said the ruling would not change the status of its relationships with its drivers, who are considered to be contractors under a 2020 ballot initiative known as Proposition 22. The fate of Prop 22 is being weighed in a separate case at the state’s top court, which last month heard arguments from a labor union and four drivers contending the ballot measure was unconstitutional, Reuters reports.