It’s been in the news for weeks now, but in case you missed it, there was a strike initiated by the drivers who are contracted by Uber and Lyft. These are the two most popular ridesharing services in the country right now and drivers went on strike to demand better pay and benefits.
Ever since these rideshare services started, drivers have been classified as independent contractors, receiving no benefits from Uber or Lyft. Now, the drivers are demanding a change.
Independent contractor status vs employee
With the discussion of the classification of Uber and Lyft drivers, it’s important to understand the differences between being classified as an independent contractor versus being classified as an employee. The differences between the two classifications are as follows:
- Independent contractors are not covered by employment and labor laws like employees
- Independent contractors are required to complete a W-9 for the entity they provide services, unlike an employee, who completes a W-4
- Independent contractors receive a 1099 if they earned $600 or more in a calendar year, while employees receive a W-2 from their employer for tax purposes
- Independent contractors negotiate the payment terms (hourly, weekly, monthly or one lump sum), while employees are paid either hourly or salary wages
- Independent contractors receive payments after submitting an invoice, while employees are paid on a weekly, bi-monthly, or monthly schedule
- Independent contractors are not included in company reports made for state and federal unemployment insurance
How can drivers fit into these categories?
The question that remains in the conversation is whether or not rideshare drivers can fit into the employee category. Some rideshare drivers have complained in the past when their accounts have been deactivated by Uber or Lyft that they should be receiving unemployment benefits. However, courts have ruled that the drivers are not employees and that they are part of a digital marketplace. Other claims have been made, specifically in the District of Columbia, that rideshare and courier companies are violating minimum wage laws.
For drivers to fit into the employee category, they would need to the meet the requirements set forth by the Department of Labor. The guidelines for determining between independent contractor and employee status include the following:
- How permanent the relationship is
- The extent the services rendered are part of the business of the principal
- The amount of investment in equipment and facilities of the contractor
- The opportunity for profit and loss by the contractor
- The control of the principal
- The degree present of the operation of the independent business
- The amount of initiative in the open market for the contractor to succeed
Have you been misclassified at your place of employment? Does your employer view you as an independent contractor when you should be considered an employee? If so, it’s time to contact the Gilbert Firm in Tennessee. Call 888-996-9731 to schedule a consultation with Tennessee wage and hour attorney Clint Scott, or use the contact form online. We operate offices in Nashville, Chattanooga, Memphis, Jackson, and Knoxville.