This archive report was first published on 25 June 2020.
Published on June 25, 2020, California is set to ask a state court judge to force Uber Technologies Inc and Lyft Inc to classify their ride-hail drivers as employees rather than contractors.
The move comes as the state implemented a law in January making it tougher for companies to classify workers as contractors rather than employees.
Uber and Lyft rely heavily on the contractor designation, which exempts them from paying drivers overtime, healthcare, unemployment, and workers' compensation.
However, with the coronavirus pandemic shutting down much of their business, gig workers were able to receive taxpayer-sponsored unemployment benefits under a federal pandemic relief bill.
California Attorney General Xavier Becerra's office plans to file a request for a preliminary injunction, which would force the change in status if approved by a judge.
Uber responded by stating that most drivers prefer the independence afforded by working as contractors, and that it has made changes due to the law.
Lyft, on the other hand, suggested that California should let voters decide on the issue during a November ballot initiative sponsored by Uber, Lyft, and delivery company DoorDash Inc.
“If the courts were to grant the Attorney General’s request, it would have a devastating effect on millions of Californians at the worst possible time,” Lyft said in a statement.
