Uber to Pay $8.4 Million Settlement Following Employee Misclassification Lawsuit

Uber Technologies Inc. has agreed to pay $84 million as a settlement fee where California drivers claimed the company misclassified them as contractors instead of company employees.

Thus, it has resulted in discussions to reinstate California’s weakened law.

According to the article on hcamag.com, the settlement applies to drivers who used the Uber Rides app and Uber EATS app from February 28, 2019, December 16, 2020, June 28, 201 and  October 7, 2021, respectively.

Further, the settlement also applies to drivers who refused Uber’s arbitration agreement.

Based on California law, a worker must be recognized as an employee rather than an independent contractor; otherwise, the company confirms that the worker fulfills all the conditions stated below.

  • The individual is free from the control and direction of the recruiting entity regarding work performance.
  • The individual carries out the work outside the typical course of the recruiting entity’s business.
  • The individual is routinely engaged in an independently established trade, business, or occupation that aligns with the work performed in the company.

Cases of misclassifying workers as independent contractors are widespread in California, resulting in the loss of benefits they should receive.

Further, companies who intentionally misclassify workers, as explained earlier, may face penalties between $5,000 to $25,000.00 per violation. Furthermore, back payments may also have to be made to the misclassified employees.

In addition, the Supreme Court has decided to consider the reinstatement of  California law, which allows workers to get together and sue their company regarding labor law violations.

Private Attorneys General Act has given employees the right to sue the company, either individually or collectively, for violating labor laws. Further, successful lawsuits grant employees the right to collect 25% of the penalties, with the balance going to the state.

Therefore, the Supreme Court has decided to consider the Private Attorneys General Act terms.

In the meantime, T. Evangelis, the attorney for Uber, has accepted the court’s verdict to review the case.

First Response is renowned for providing highly competent HR Advisors and reliable workplace investigations.

Contact us now to explore more of our services!

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on email
Email
Share on facebook
Facebook

Grow your HR Knowledge

Get the latest HR Management News and Intel in your inbox for free