Uber Reaches $8.4 Million Settlement for Driver Misclassification Lawsuit

The driver misclassification suit against the prominent ride-share company, Uber, reached a preliminary deal last month. The suit was filed in the U.S. District Court for the Northern District of California after several Uber drivers in the state filed misclassification claims which prevented them from receiving full employment benefits. The preliminary deal will require Uber to pay $8.4 million to more than 1,300 Golden State drivers who have worked up until the enactment of Proposition 22 in 2020– a law implemented in the state of California categorizing ride-share drivers as independent contractors. The class members were given approximately $4,750 each. The federal judge on the case further reiterated that the amount will be placed in “the hands of the drivers” and the remaining will go to a San Francisco nonprofit organization. 

Allegations Discussed in the Suit 

An article posted on Law360 highlights the complaints brought forth by the class members in the suit. The drivers expressed that they were misidentified as independent contractors by the company and were not provided with adequate pay. Additionally, they were not given reimbursements for business expenses, and were not given itemized pay statements. Although Proposition 22 is currently in place, they are still able to pursue their claims for the period they’ve worked prior to the passing of the law. Since the passing of this legislation, many workers in similar companies like Lyft and  DoorDash, have shared their disapproval and urged the court to reconsider Proposition 22, deeming it as “constitutionally problematic.” 

This is not the first misclassification lawsuit that the company has encountered. In 2020, Uber faced another lawsuit for similar allegations which settled for $20 million for 11,000 drivers in the states of California and Massachusetts. Although the decisions reached by the court on both cases do not reverse or dismiss Proposition 2022, it provides a way for Uber drivers to receive compensation for the unlawful treatment they allegedly received by the company before the new law went into effect. 

Federal Laws on Employee Misclassification

There are federal and state laws that protect employees from being miscategorized as independent contractors and from being subjected to unlawful treatment in the workplace. The Department of Labor notes that an employer cannot classify their employees as independent contractors simply because they want to, but that there are “many factors that are considered in determining whether the employer has the right” to categorize their workers as employees or independent contractors . The DOL uses an “economic reality test” to decide who is an employee based on seven factors outlined by the U.S. The Supreme Court. Employers are required by law to classify their employees correctly and provide the FLSA benefits they are legally entitled to. 

Seek Legal Assistance Today 

If your employer has misclassified you as an independent contractor, seek assistance from the Working Solutions Law Firm, located in New York City and Livingston, NJ. Contact us today at (646) 430-7930 to schedule a free case evaluation and receive experienced legal counsel. Our employment lawyers work out of both New York City and New Jersey and can evaluate potential issues such as unpaid wages and overtime as well as other issues regarding the “misclassification” of employees.