California Labor Law: Looking Ahead to 2016

Sacramento, CAWith lawsuits against Uber and Lyft looming and major changes to California employment law taking effect January 1, the year 2016 could be a big one for California labor lawsuits. Here’s a look at what’s going on in California labor law.

Lawsuits against Uber and Lyft are still working their way through the courts, although US District Judge Edward Chen has handed Uber a few setbacks in its lawsuit. Drivers involved in the California lawsuit allege they are employees but have been misclassified as independent contractors, and therefore are not paid minimum wage nor are they given other employee protections. In 2015, Judge Chen ruled that the lawsuit can go ahead as a class action and also that Uber’s arbitration clause was unenforceable, meaning many drivers who signed the arbitration clause will be eligible to join the lawsuit.

The courts tend to look at how workers are treated and how much authority or discretion they have in their job when determining if the worker is a contractor or an employee. The more control the employer has over the worker’s job, the more likely the courts are to consider the worker an employee. If a worker is considered an employee, the worker is then entitled to minimum wage and overtime, and other protections.

As of January 1, that minimum wage went up from $9.00 an hour to $10.00 an hour. Although that won’t affect the amount of money the Uber drivers seek, it will affect drivers going forward if they are found to be employees and not independent contractors.

Along with the increase in minimum wage is a change to the Fair Pay Act, making it illegal for employers to pay employees less than those of a different sex for work that is substantially similar, even when the employees work at a different job site or have different job titles. The change also prohibits employers from preventing employees from discussing their wages with other employees. As a result of changes to the Fair Pay Act, 2016 could see more lawsuits filed alleging employers do not have equitable pay practices.

In addition to Uber and Lyft, Amazon Prime also faces a lawsuit alleging its drivers were misclassified as independent contractors. The Uber lawsuit is Douglas O’Connor et al v. Uber Technologies Inc, case no. 3:13-03826, US District Court, Northern District of California.