Uber class action lawsuit in California over driver pay to proceed

  • Uber faces a class action lawsuit filed by 4,800 drivers in California, a court ruled Tuesday.
  • Drivers sued for Uber’s refusal to pay AB-5 unemployment benefits before Prop 22 was passed.
  • The ruling allows them to complain together about expenses and pay slips, but only separately about payroll amounts, overtime and sick leave.
  • You can find more stories on the Business Insider homepage.

A federal court handed a minor victory to Uber drivers in California on Tuesday that allowed them to continue some parts of their class action lawsuit for unemployment benefits the company owes them.

The court ruled that a group of roughly 4,800 drivers can collectively sue Uber for allegedly denying them reimbursements and detailed payrolls – benefits guaranteed to all employees under state law – by making them independent prior to Proposition 22 being passed Wrongly classified contractors.

The court said, however, that drivers must individually assert whether Uber failed to pay them the minimum wage, overtime, and sick leave – which employees are also guaranteed.

Uber did not respond to a request for comment on this story.

Several drivers filed lawsuits against Uber last year after the company refused to classify them as employees after the passage of AB-5 in California in an effort to extend the state’s existing OSH to a larger group of workers.

California eventually sued Uber and Lyft for failing to comply, state regulators found it applies to both companies, and a state appeals court agreed.

However, with legal challenges pending from Uber and Lyft, voters passed Proposition 22, a company-backed polling initiative that exempted ridesharing and grocery delivery app companies from AB-5 compliance.

This new law, which specifically designates drivers and delivery staff as independent contractors for these apps, went into effect in December. However, the drivers stated that Uber should have treated them as employees in the period after AB-5 went into effect but before Prop 22.

As a result, the drivers said Uber violated California labor laws by failing to: reimburse business expenses, pay the minimum wage, pay overtime, produce detailed payroll slips, and take paid sick leave.

The lawsuit is among several Uber has faced over worker grading that could hook the company for substantial back payments to drivers. The California Supreme Court recently ruled that Dynamex, a court ruling that became the legal basis for AB-5, applies retrospectively, which could make gig companies liable for repayments made several years before AB-5’s transition.

Axel Springer, the parent company of Insider Inc., is an investor in Uber.

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