More Service Companies Facing Lawsuits over Employment Status
With the advent of companies like Uber and Lyft, the number of on-demand service companies has been increasing dramatically. However, lawsuits filed against these companies regarding the status of their workers and overtime may bring a stop to the way that they do business.
On-Demand Service CompaniesMost recently, the grocery delivery service Instacart, housecleaning company Homejoy, and delivery service companies Postmates and Try Caviar have all had lawsuits filed against them in California's Northern District. The way that these companies operate is simple: the companies use an app on a smartphone for their customers to order services and have them delivered to their home. The people providing the service, whether it's shopping, home cleaning, or delivery, drive in their own vehicles, and the company takes a part of the proceeds of the transaction.
On-Demand Service Company LawsuitsAll of the lawsuits currently pending against on-demand service companies claim that the workers that provide the service have been misclassified as "independent contractors" when they should be classified as employees. As such, the employees should be entitled to benefits, like overtime, which they do not currently get. Thousands of people currently identified as independent contractors could be affected by these lawsuits. Instacart has over 1,000 people shopping for groceries, and up to 10,000 people could be included in the lawsuit. The lawsuit is looking to include "everyone who 'performed grocery delivery service' for Instacart from Jan. 1, 2012 to the present." Two lawsuits have been filed against the home cleaning on-demand service Homejoy. The first lawsuit is similar to others that want to identify people as employees. The other lawsuit claims that the company fails to pay minimum wage or overtime, and it requires the independent contractors to pay for their own business-related expenses. The Homejoy lawsuits claim that "cleaners are an integral part of Homejoy's business of providing cleaning services, among other services, to its customers." However, the company's terms of service claim that it is merely a "venue" or a "platform" that connects consumers to cleaners in their area and not an actual cleaning service provider.
Other On-Demand Service LawsuitsIn the other on-demand service lawsuits against Uber and Lyft, the judges in the case could not conclude whether the companies are more than simply software platforms. They deferred to a jury to determine whether the independent contractors should be considered employees. However, an attorney for the plaintiffs in the case against Uber claims that "When companies have control over their workers, when they get to dictate how they should act, when they get to decide whether they can work or not work, those are employees . . . So these workers are entitled to the protections of the law, to get their expenses reimbursed, to be guaranteed overtime, to make [at least] minimum wage."