California’s strict ABC test is difficult to trace back to the fact that the worker is an independent contractor, so the state’s traceability applies. The state Supreme Court ruled on Thursday that the decision could harm Uber, Lyft and other performance companies in numerous lawsuits.
The ABC test was issued in April 2018 in a decision called Dynamex, which stated that workers must be treated as employees unless they (a) work outside the control of the employing entity; (b) are in the hired entity Work outside the ordinary courts of the business; (c) There are independent companies engaged in such work.
Chief Judge Tani Cantil-Sakauye issued a consensus. He said: “Public policies and fairness issues, such as protecting workers and benefiting companies that meet wage order obligations, are conducive to retrospectiveness. Apply Dynamex.” The Ninth Circuit Court of Appeals stated in May 201
The decision in the Dynamex case is the basis of California’s controversial AB5 work law, which codifies the ABC test, exempts many occupations and extends its scope beyond wage orders.
Uber, Lyft, DoorDash and other performance companies classify workers as independent contractors rather than employees, saying they rely on the flexibility of the model. It also saved them millions of dollars in benefits, minimum wage, overtime and other expenses. The performance company spent $220 million to convince voters and passed Proposal No. 22 in November, which allowed workers to maintain their status as independent contractors and adopted AB5 to exempt them from mid-December. The union group sued this week to overturn the measure.
Proposal 22 does not retroactively protect performance companies. They face a series of lawsuits from government agencies and their own workers regarding employment classification. The Supreme Court’s ruling means that if the performance company loses the lawsuit, they will face a larger fine, because they may be found responsible for the lawsuit before Dynamex takes effect in April 2018.
In the largest case, the California attorney general and three city attorneys sued Uber and Lyft in May. The California State Labor Commissioner sued two ride-hailing companies in August, alleging they stole wages by misclassifying drivers. Various drivers and couriers have jointly filed a misclassification lawsuit against Uber, Lyft and other performance companies.
“They will be unlucky,” said Bob Esaza, a partner at the management law firm Duane Morris. “For any pending case, the test applicable to them will be Dynamex, which will be traced back to the limits permitted by the restriction regulations,” which is usually three to four years, depending on the applicable business code.
“Although Uber and Lyft spent a record amount of money to rewrite the law to benefit themselves, they could not change the fact that in the years before Proposition 22, they had not classified drivers as employees, thus violating The law.” John Coté said, a spokesperson for Dennis Herrera, the San Francisco Attorney, was one of the plaintiffs in a lawsuit filed by the California Attorney General against taxi companies. “This decision strengthens the position we have always maintained.”
Uber and Lyft did not immediately respond to requests for comment. The California Attorney General’s Office declined to comment.
Boston attorney Shannon Liss-Riordan filed a misclassification case on behalf of show workers and janitors. She said this decision should help California workers compensate for wage violations before April 2018. She has litigation and arbitration cases against Uber, Lyft, and Grubhub. , DoorDash, Postmates, Instacart, Ship and Amazon.
She said in an email: “The court emphasized the need for strict testing because the previous loose standards… lead to inconsistent results and fail to adequately protect workers.” “This decision is a further prosecution against Proposition 22.”
But MC Sungaila, chairman of the appeals practice of Bukhaterte Law Firm, said the new decision may be harmful to employers.
She said in a statement: “After the pandemic, this has raised concerns about small businesses, which may be hit by forward-looking wage and hours lawsuits.”
Laura Padin, senior staff attorney for the National Employment Law Project in Washington, said that in addition to performance workers, the ABC test also affects other industries.
She said: “In the industries we see (misclassification), the jobs of people of color are mainly done by people of color, such as cleaners, home care and trucking.” “Usually these industries are low-paying industries, workers’ Bargaining power is not high.”
She said that the court’s ruling “will make it much easier to hold companies that have been engaged in such programs for many years.”
For example, in the same situation as the basis for Thursday’s ruling, Jan-Pro, a cleaning company, requires its janitor to prove that they have an independent franchise, thereby avoiding the practice of turning most of the immigrant labor into employees. She said that it was “although Jan-Pro controls most of the work and they are not running their own business.” “Jan-Pro is able to evade the protection of the workplace and transfer to workers the risks and expenses normally borne by the employer.
Carolyn Said (Carolyn Said) is a writer for the San Francisco Chronicle. Email: firstname.lastname@example.org Twitter: @csaid