SAN FRANCISCO, CA – Today there are numerous applications and services provided to customers promising instantaneous service such as Uber, Lyft, Grubhub, UberEats, to name a few. It is a dog eat dog world out there, and due to the increasing competition, some companies are taking shortcuts to keep their prices low at the expense of their “employees” or, as they would say, the independent contractors working in the gig economy. These employees are fighting back by filing class-action lawsuits against their employers.
Postmates is an internet delivery company offering on-demand delivery of lunch, dinner, groceries, office supplies or anything else a customer may need. Recently the delivery giant has fallen on hard times and began to contract out some of their services to save money. In August 2017, Postmates decided to let go of all of its city managers and community managers, centralizing the majority of its operations in its San Francisco headquarters. In a statement,
According to a statement by Postmates headquarters,
“Postmates has grown rapidly over the last six years — and continues to grow in more than 200 cities across the U.S. As part of that growth, we’ve decided to centralize some of our regional marketing efforts within our San Francisco headquarters… Centralizing these functions will enable us to execute more quickly — and ultimately help us be more nimble and effective as we continue to aggressively scale the company. Our general managers will remain in place and continue to help lead our local efforts. We are thankful to our city managers for all their hard work, and we’re confident that they will be successful in their future endeavors.”
The Postmates couriers are only further victims of a gig economy, where employers attempt to take advantage of their employees’ independent contractor status. These couriers are the hardworking men and women that trek through snow, thunderstorms and freezing temperatures to deliver your last minute desires. Now, Postmates couriers on both the west and east coasts are taking collective legal action thanks to their employment law attorneys.
Back in 2015, Postmates couriers complained of unlawful employment discrimination and initiated a federal lawsuit in Oakland, California. They claimed that Postmates misclassified its couriers as independent contractors and paid them below minimum wage. Specifically, the lawsuit stated violations of the federal Fair Labor Standards Act and Private Attorneys General Act, in addition to state wage and hour laws for couriers in New York, California, Washington, D.C., and Massachusetts. According to the employment discrimination attorneys, each proposed class would include, approximately: 88,000 couriers in California, 28,000 couriers in New York, 8,000 couriers in Washington, D.C., 3,000 couriers in Massachusetts, and 107,000 couriers throughout the rest of the US.
This month seems that Postmates has reached a nationwide settlement with its disgruntled “employees.” The plaintiffs asked a Californian District Judge Jeffrey White to approve an $8.75 million to resolve their cases. In addition to the $8.75 million settlement, other terms would include changes to Postmates’ business practices in order to strengthen couriers’ rights by creating a method for couriers to challenge termination decisions in arbitration at Postmates’ expense and the means for couriers to give feedback to the company.
Judge White has yet to rule on the proposed settlement but stated, “A class recovery through settlement may be the best hope for most of these couriers recovering anything at all on these claims, given the very low number of couriers who would file individual claims, if required to do so.”
On the east coast, another complaint was filed over the summer in the New York Labor Department. This lawsuit accuses a similar delivery service, Relay Delivery, of committing wage theft by classifying its workers as independent contractors rather than employees and paying them $7.50 an hour. This is 80 cents below the New York tipped hourly minimum wage requirements. Relay Delivery makes deliveries for Meatball Shop, Pinkberry, Hale and Hearty, and several other New York City restaurants.
The nation is watching because similar employment statuses are so prevalent in today’s modern gig economy and few courts have definitively ruled on whether the gig workers, like Postmate couriers, qualify as employees under employment wage and hour or discrimination lawsuits. Until such rulings in California or in other federal courtrooms are established, the law will remain unclear in many parts of the country.
Qualifying as an employee rather than an independent contractor is important with regards to federal government agencies because employees are covered by federal anti-discrimination and other employment laws, but independent contractors are not.
Under federal law, there are certain factors are to be used to determine whether a worker is in an employment relationship with an employer. This is a fact-specific determination that “depends on whether the [hiring party] controls the means and manner of the [worker]’s work,” or in summary, the test primarily turns upon control. While not every factor must be met, the courts look to the following factors:
- The employer has the right to control when, where, and how the worker performs the job.
- The work does not require a high level of skill or expertise.
- The employer furnishes the tools, materials, and equipment, for example, the employer provides the workspace, equipment, and office supplies.
- The work is performed on the employer’s premises.
- There is a continuing relationship between the worker and the employer.
- The employer has the right to assign additional projects to the worker.
- The employer sets the hours of work and the duration of the job.
- The worker is paid by the hour, week, or month rather than the agreed cost of performing a particular job.
- The worker does not hire and pay assistants.
- The work performed by the worker is part of the regular business of the employer.
- The worker is not engaged in his/her own distinct occupation or business. The employer provides the worker with benefits such as insurance, leave, or workers’ compensation.
- The worker is considered an employee of the employer for tax purposes, for example, the employer withholds federal, state, and Social Security taxes.
- The employer can discharge the worker.
- The worker and the employer believe that they are creating an employer-employee relationship.
Do you have rights? Yes!
While it can be confusing when it comes to determining one’s status as either an agency employee or independent contractor in today’s modern economy, the skilled New York City sexual harassment attorneys at the Derek Smith Law Group, PLLC have years of experience litigating claims of employment-related claims. Working together with our Philadelphia sexual harassment attorneys, we have recovered millions on behalf of our clients who were discriminated against because of their gender. If you feel you have been discriminated against because of your gender, please give our attorneys a call at (800) 807-2209 for your free consultation.
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