Labor Commissioner's Uber Decision: A Reminder of Misclassification Dangers
On June 3, 2015, the California Labor Commissioner ruled that a San Francisco-based driver for the popular ride coordination service Uber Technologies, Inc. (“Uber”), was an employee rather than an independent contractor. This decision is representative of the growing incidence of independent contractor misclassification litigation in California. Misclassification litigation can be potentially costly because if a company is found to have misclassified an employee as an independent contractor, it is required to retroactively comply with various provisions of the California Labor Code, and might also be subject to claims for penalties and interest. Companies who contract with independent contractors should consult labor counsel to discuss recent trends and confirm compliance with this developing area of law.
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