There is a lawsuit that has been filed against Uber and Lyft over the issue of employee classification. In the lawsuit, Uber and Lyft are accused of classifying their drivers as independent contractors and not employees as it should be. According to a Massachusetts Attorney general’s office, Uber and Lyft have for many years now misclassified their drivers terming them as independent contractors and not employees.
The issue of classification is of great importance as it determines employee benefits like minimum wage, employment insurance and overtime pay and finally workers compensation. When employees are classified only as independent contractors and not employees then they miss out on the benefits shown above.
Many experts argue that many companies use this approach with the view of denying their employees some of the benefits they deserve. It is because of these reasons that the case of Uber and Lyft has caught the attention of the Attorney general’s office.
The Outcome of the Uber and Lyft Lawsuit
The Uber and Lyft lawsuit was one of its kind given that it came with two developments outcomes. In the first development, a non-jury trial sat in early 2024 to determine the whole issue of driver classification by Uber and Lyft. However, even before the jury could reach a decision on the trial, Uber and Lyft Reached a settlement with the state over the lawsuit in June of the same year.
In the lawsuit, the two companies who were the defendants in the lawsuit agreed to standard minimum pay standard of $32.50 per hour for all the drivers based in Massachusetts. On top of that, the two companies also agreed to pay a settlement amount of $175 million to settle their prior underpayment claims by the state.
By agreeing to settle the lawsuit, the plaintiff and the defendant ended the lawsuit effectively. The case has since been ended only awaiting an approval by the court of law to be put to rest completely. However, even with the case ended, there debate over it is far from over as many people have used this case to show just how much classification of workers can make a huge difference in the employee rights in companies.
With the settlement agreement now struck, it shall be a case of wait to see whether Uber and Lyft drivers in other states will follow suit by demanding proper classification. It is also not clear whether the settlement terms of the lawsuit in Massachusetts will apply to other states in America. Uber and Lyft drivers have long cried over low payments and mishandling by their companies. The settlement in the Uber and Lyft is seen as landmark and a breakthrough for Uber and Lyft drivers who have long decried mistreatment.
The $ 175 million that was pledged by the will be channelled to all drivers who successfully prosecuted a case of underpayment in the past. The number of drivers that were affected by the prior underpayment are still unknown and so is the amount of money each driver will get from the settlement agreed on in the lawsuit.
