California Attorney General Xavier Becerra is suing Uber and Lyft over their alleged misclassification of their workers as independent contractors instead of as employees.
Becerra filed a lawsuit against the two rideshare companies on Tuesday, saying that they violated California’s new Assembly Bill 5 law that requires app-based companies to identify contractors as regular employees of the company. Under the bill, contractors are eligible for basic protections like minimum-wage requirements, health benefits, and Social Security.
“These companies will take the workers’ labor, but they won’t accept the worker protections. California has ground rules with rights and protections for workers and their employers. We intend to make sure that Uber and Lyft play by the rules,” Becerra said.
The lawsuit seeks up to $2,500 for each violation, as well as a permanent halt to misclassifying drivers and civil penalties that could reach up to hundreds of millions of dollars.
Becerra said that especially during the coronavirus pandemic, rideshare drivers are missing out on basic employee benefits that would allow them some relief during this difficult time.
“The companies deny that their drivers are entitled to state unemployment insurance, as well as state-mandated paid sick leave and other employee benefits. The companies are thereby shirking their obligations to their workforce and shifting the burden onto drivers and taxpayers at a time when they are most vulnerable,” Becerra’s announcement says.
A Lyft spokesperson told Digital Trends said they will work with Becerra.
“We are looking forward to working with the Attorney General and mayors across the state to bring all the benefits of California’s innovation economy to as many workers as possible, especially during this time when the creation of good jobs with access to affordable healthcare and other benefits is more important than ever,” the spokesperson said.
Digital Trends also reached out to Uber to comment on the lawsuit. We will update this story when we hear back.
Lyft and Uber have previously been outspoken about their disagreements with Assembly Bill 5. The two rideshare companies joined forces with Door Dash in August and spent $90 million for a ballot initiative meant to exempt them from the bill, which was ultimately declined.
Assembly Bill 5 was signed into law in September and officially took effect on January 1.
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