Gig Economy Workers are Independent Contractors, Not Employees, According to New California Ruling

You’ve probably heard about the benefits of working in the gig economy. You set your own hours and control how much you earn. Some companies even offer hefty sign-up bonuses. Lately, critics have argued that these jobs are too good to be true. Once you subtract your expenses, you’ll be lucky to earn minimum wage in many of these positions. That’s what led GrubHub driver Raef Lawson to file a lawsuit.

Lawson claimed GrubHub paid him less than minimum wage, failed to reimburse his expenses and did not pay overtime. All of these allegations are a violation of California labor law. Lawson’s case hinged on whether or not he was an employee of GrubHub, in which case he would be entitled to legal protection, or merely an independent contractor.

On February 8, 2018, U.S. Magistrate Judge Jacqueline Scott Corley ruled against Lawson, stating that he is not an employee of GrubHub. The Judge said California law made it clear Lawson is not an employee. However, she urged the California legislature to consider the changing nature of employment under the gig economy and consider updating the law, according to the Los Angeles Times.

GrubHub and other gig economy companies do not view their workers as employees. Drivers for GrubHub and similar companies like Uber and Lyft are free to choose their own working hours and areas. Often, drivers are often allowed to wear their own clothing and choose their own routes.

Currently, Uber is facing several class-action lawsuits from drivers. These workers are seeking backpay and damages because they claim they should be classified as employees, not contractors. Uber did not comment on the GrubHub case, but the company is likely celebrating the ruling behind closed doors.