In this April 4, 2014 file photo, a sign for GrubHub is displayed on the door to a New York restaurant. (AP Photo/Mark Lennihan)
(CN) A former Grubhub driver made a last-ditch entreaty to the Ninth Circuit on Wednesday hoping that a landmark change to California’s worker classification law will be enough to reverse his loss in federal court years ago.
Raef Lawson sued Grubhub in 2015 for misclassifying him as an independent contractor during the four months he spent delivering food in 2015 and 2016, making him ineligible for overtime pay and expense reimbursement.
Lawson brought his action under California’s Private Attorneys General Act, a law that allows private citizens to act in the place of the state attorney general to recover penalties for labor violations.
Ninth Circuit ruled that California law relating to whether workers can be classified as employees is not preempted by FAAAA. It will remain difficult under California’s current test for transportation companies to establish independent contractor relationships with drivers.
How the PRO Act defines gig workers By: Melinda Rizzo, Contributing Writer May 14, 2021
11:40 am
Under the proposed Protecting the Right to Organize (PRO) Act gig workers including freelancers, independent contractors and temporary workers would need to pass a test to be classified as gig workers.
There are two tests currently used to determine the status of an independent contractor. The ABC test, which grew out of California’s AB 5 labor law has been incorporated into the federal PRO Act.
The common law or IRS test has been used by sole proprietors and independent contractors for decades to file and pay federal, state and local income tax, as well as Social Security and Medicare taxes.
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In an unsurprising and expected move, on Thursday, May 6th the Biden Administration’s Department of Labor (“DOL”) published its
Final Rule withdrawing the Trump Administration’s January 7, 2021 “Independent Contractor Status under the Fair Labor Standards Act”
rule. Practically, the Biden Administration’s Final Rule keeps in place the “totality of the circumstances” economic realities test the DOL has traditionally used in determining independent contractor status under the Fair Labor Standards Act (“FLSA”) and withdraws the “focused economic-reality” test the Trump Administration sought to impose, but which the DOL never implemented. The Biden Administration cited three independent reasons for the decision to withdraw the January 7th rule:
On 30 April 2018, the California Supreme Court issued the seminal decision in
Dynamex Operations West, Inc. v. Superior Court, adopting the “A-B-C Test” for determining independent contractor status in the state. The A-B-C Test, which superseded the prior, less stringent common law
Borello test,
1 was later codified by the state legislature in California Assembly Bill 5 (AB-5). Under AB-5, a worker is presumed to be an employee and not an independent contractor unless the entity can establish the following three elements:
(A) The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; (B) The person performs work that is outside the usual course of the hiring entity’s business; (C) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.