California has ruled that an Uber driver (one specific person) is an employee, and not an independent contractor. The impact on other Uber employees, as well as companies with similar business models such as Lyft and Sidecar has yet to play out in California Courts.
Last Month Fed-Ex settled its case with California for $228 Million, even though the final battle of whether it is legal for the company to classify its drivers and workers as independent contractors is evidently far from over.
The question on every employer’s mind is simple:
what is it that will appropriately allow us to have “independent contractors” working for our business, instead of bearing the additional costs and legislated mandates associated with “employees?”
The central issue in this argument continues to be “control” – the amount of direct control the employer has over the tools and technology associated with the task at hand, as well as the scheduling of that task and other uniform, appearance, behavioral and “branding” related issues. It will be quite some time before these court cases come to fruition and we understand the new “rules” that will govern independent contractors from both the IRS’ and California tax agencies point of view.
If you have independent contractors who are not truly and completely in control of their schedule, when and how they do their work, as well as the tools, technology and uniforms associated with your company’s projects, or the associated tax ramifications we invite you to call for a free consultation at 866-631-3470.
