Uber and Lyft, the two largest rideshare companies in the United States, currently classify their drivers as independent contractors instead of employees. An ongoing lawsuit in Suffolk Superior Court declares that Massachusetts rideshare drivers are misclassified under the 2004 Massachusetts Wage and Hour Law.
In July 2002, Attorney General Maura Healey sued Uber and Lyft to classify their drivers as employees. The referenced 2004 Massachusetts Wage and House Law is intended to protect gig economy workers. The gig economy is a free market system where companies hire short-term independent workers.
Under the legislation, rideshare drivers should already have employee status. According to the Attorney General, Uber and Lyft have been incorrectly labeling workers for over a decade. While independent contractors have the ability to create their own hours, they do not have access to minimum wage, overtime, earned sick time, and other benefits.
According to the Massachusetts law, individuals performing services for another party are considered employees. However, there are exceptions under which an individual can be classified as an independent contractor. A worker can be classified as an independent contractor if their work satisfies any part of the following three-pronged classification test:
- They are free from control and direction.
- The service they provide can be performed outside of their business with the employer in question.
- The worker is customarily engaged in an independently established trade or business of the same nature.
In the event a company does not classify its workers as employees, state law requires the organization to prove that their independent contractors satisfy each prong of the three-part test. The Attorney General’s complaint states that because drivers are integral to the companies achieving their purposes, they require reclassification.
According to Henry De Groot, executive director of the Boston Independent Drivers Guild, Uber and Lyft drivers do not qualify for independent worker status: “You could look at prong three, it says you have to be independently established in a business or trade. It’s not like I was doing passenger transport being a chauffeur before I started driving for Uber and Lyft. They’re the ones who set me up. I wasn’t independently established.”
In response to the lawsuit, Alix Anfang, an Uber spokesperson, said, “We are confident that, unlike California, Massachusetts leaders will work together to ensure that drivers are able to gain new protections and benefits while keep the flexibility they overwhelming want.”