California Attorney General Xavier Becerra and the city attorneys of Los Angeles, San Diego, and San Francisco, on Tuesday sued Uber and Lyft for misclassifying their drivers as independent contractors in violation of the law.
Pursuant to authority codified by Assembly Bill 5 of 2019 and California’s Unfair Competition Law, Becerra and the city attorneys allege that Uber’s and Lyft’s misclassification of drivers deprives workers of workplace protections, such as the right to minimum wage and overtime, and access to paid sick leave, disability insurance, and unemployment insurance.
The lawsuit was filed in the Superior Court of San Francisco. In it, the coalition seeks restitution for workers, a permanent halt to the unlawful misclassification of drivers, and civil penalties that could reach hundreds of millions of dollars.
The lawsuit seeks up to $2,500 for each violation of the California Unfair Competition Law and up to another $2,500 for violations perpetrated against senior citizens or individuals with disabilities.
“Californians who drive for Uber and Lyft lack basic worker protections — from paid sick leave to the right to overtime pay. Uber and Lyft claim their drivers aren’t engaged in the companies’ core mission and cannot qualify for benefits,” said Becerra said in a statement. “Sometimes it takes a pandemic to shake us into realizing what that really means and who suffers the consequences. Uber and Lyft drivers who contract the coronavirus or lose their job quickly realize what they’re missing. But it’s not just these workers who lose. American taxpayers end up having to help carry the load that Uber and Lyft don’t want to accept. These companies will take the workers’ labor, but they won’t accept the worker protections. California has ground rules with rights and protections for workers and their employers. We intend to make sure that Uber and Lyft play by the rules.”
A Lyft spokesperson issued the following statement on behalf of the company:
“We are looking forward to working with the Attorney General and mayors across the state to bring all the benefits of California’s innovation economy to as many workers as possible, especially during this time when the creation of good jobs with access to affordable healthcare and other benefits is more important than ever.”
Uber and Lyft have consistently refused to classify their drivers as employees in violation of California law, according to the lawsuit. Instead, the companies ignore the fact that California law allows for drivers to choose when and how much to work and still be classified as employees.
The lawsuit asserts that Uber and Lyft gain an unfair and unlawful competitive advantage by inappropriately classifying massive numbers of California drivers, and as a result, the companies each avoid hundreds of millions of dollars in social safety net obligations, skipping out on contributing to state payroll taxes that are used to fund general health and welfare programs that benefit all Californians.
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