The California Court of Appeals recently gave Uber and Lyft more time to comply with a new law that would have made drivers employees and not independent contractors. This would have had a major effect on the drivers’ rights under the state’s workers’ compensation laws by enabling Uber and Lyft drivers to receive medical treatment and indemnity benefits under workers’ compensation if they were injured in a car crash, for example.
The change in the law would not only have affected Uber and Lyft drivers, but all independent contractors. Every independent contractor would have to undergo the new “ABC test” to determine who is/isn’t an independent contractor.
The California law that the court recently halted stated that a worker could only be an independent contractor if they met each of these 3 factors:
- The worker is free from the control and direction of the hiring entity in connection with the work’s performance, both under the contract for the performance of the work and in fact.
- The worker performs work that is outside the usual course of the hiring entity’s business.
- The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
This test makes it very hard for an individual to be legally considered an independent contractor.
In the world of Uber and Lyft drivers, they are engaged in work that is the principle part of the company’s interests (i.e. “ridesharing”). If a worker is not an independent contractor, they would be an official employee and therefore provided with all of the benefits a worker should be entitled to if they are injured at work.
Georgia has yet to adopt this test and still uses a 13-part test to determine if the individual is an employee or an independent contractor. It’s a matter of fact that is determined by an administrative law judge and is based on many factors.
