The Fight Over California’s Gig Economy Law Escalates: Drivers Sue Uber for Back Pay

A group of Uber drivers recently filed a class-action lawsuit. The lawsuit filed against Uber at the end of 2019 seeks retroactive pay, benefits, and overtime for Uber drivers. Pay, benefits, and overtime would be retroactive to April 2018, the time at which the Dynamex ruling was issued by the California Supreme Court that set new standards for when companies are expected to provide benefits to workers.

Uber Drivers Alleged Violations of Labor Law:

The lawsuit was filed in the U.S. District Court for the Northern District of California. In the suit, plaintiffs argue that Uber improperly classifies drivers as independent contractors instead of employees with access to employee benefits and employee protections. The legislation was signed by Gov. Gavin Newsom in September 2019 and codified the Supreme Court ruling into law. Assembly Bill 5 creates an ABC test for contractor-employee distinction based on three factors.

Uber Claims Their Practices Do Not Violate Labor Law:

When asked for a comment on the suit, Uber did not immediately respond, but later stated that they do not plan to make changes to their practices to comply with the law because they maintain their driver classifications are correct. Together with other gig economy powerhouses (Lyft, Doordash, etc.) Uber is also floating a ballot measure that could allow them to continue the practice of classifying drivers as independent contractors.

The suit names three dozen Uber drivers as representatives for current and former Uber employees. Class size is an estimated 50,000 to 75,000 drivers that opted out of arbitration clauses. The plaintiffs claim that drivers should be classified as employees and be eligible for minimum wage, overtime pay, mileage reimbursement, cell phone usage, and additional reimbursement for expenses.

AB 5 Increases Misclassification Lawsuits:

With AB 5 taking effect as of January 1, 2020, more lawsuits are expected throughout the year as workers learn about their newly granted rights. Assemblywoman Lorena Gonzalez, D-San Diego, championed AB 5 and also encouraged California attorneys to file lawsuits over misclassified employees.

In response to the drivers’ fight against the gig economy’s practice of classifying them as independent contractors, two other groups have sued in a challenge to the legal claims insisting that it would dramatically decrease their ability to earn a living.

If you need to talk to someone about misclassification or if you need to file a misclassification lawsuit, get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

New California Labor Laws: Are Changes Coming to Your Workplace?

Are new California labor laws bringing changes to your workplace? Have you already seen the new laws take effect at your place of employment? 2020 is said to be a year of reckoning for California businesses with sweeping new California labor laws going into effect to curb longtime employment practices that generate economic inequality and keep the power in the hands of employers.  

Many California companies will be forced to reclassify hundreds of thousands of independent contractors as employees in 2020. Doing so will leave the workers with access to broad labor law protections. Another new California labor law should prevent employers from forcing workers to sign closed-door arbitration proceedings to protect the employer from potentially expensive lawsuits and court proceedings. 

Other notable employment law changes California workplaces will need to embrace in 2020 include: 

A law requiring employers to offer workers a place for mothers to pump breast milk (other than.a bathroom). 

A law designed to make it easier for first responders to obtain workers’ compensation for post-traumatic stress disorder (PTSD). 

A statute banning discrimination in the workplace based on a hairstyle. For example, Afros, dreadlocks, cornrows, etc. 

A statute that grants organ donors additional guaranteed leave. 

An extension of whistleblower rights and protections to patient rights advocates assigned to county mental health centers. 

The changes to California’s employment law intend to improve job quality for the state’s workforce by addressing day-to-day issues on the job. Look for additional changes to California’s minimum wage law, corporate diversity, and discrimination labor law standards. California leads the way in labor law and is working to prevent employers from going around the set standard.

If you have questions about California labor law violations or how new changes to California labor law may affect you, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

Truck Drivers Challenge California’s New Gig-Economy Law, Assembly Bill 5

In November 2019, the California Trucking Association filed a federal lawsuit to challenge the new California state law attempting to force gig-economy companies to treat their drivers and workers as employees. In doing so, the workers would be entitled to benefits and protections under labor law like overtime pay and sick leave.

California’s new law was based on the 2018 California Supreme Court ruling setting higher standards for when a company can classify a worker as an independent contractor. Assembly Bill 5 is scheduled to go into effect in 2020. (Governor Gavin Newsom signed it in September 2019).

The California Trucking Association argues that the law will deny a lot of truckers the opportunity to work as independent drivers in the state of California. By driving as independent contractors, truckers are able to profit from their own vehicles and set their own schedules. The new bill threatens cover 70,000 truckers’ livelihoods and according to the California Trucking Association, also violates federal law.

Truckers working as independent contractors are frequently experienced drivers who have already worked as employees and actively chose to strike out on their own instead. The California Trucking Association feels they should not be deprived of this lifestyle and career choice. A spokesman for the association explained their stance by indicating that the law can protect workers from misclassification without taking away the rights of independent truckers to actively seek a living on the road in California outside of the traditional employment model.

Supporters of Assembly Bill 5 insist that the law only strengthens the rights of workers and makes sure that employers do not deny their workers benefits they have earned (like minimum wage, paid family leave, and overtime). Some professional classifications receive broad exemptions from the new rules under the law (i.e. lawyers, real estate agents, etc.) But truckers were not offered similar treatment, although the lawmakers did offer delayed implementation to some offering construction related services.

The complaint was filed in the U.S. Southern District Court. The complaint challenges both Assembly Bill 5 and the underlying California Supreme Court ruling commonly referred to as Dynamex.

If you need to discuss Assembly Bill 5 or if you are misclassified as an independent contractor, please don’t hesitate. Get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

$2.75 Million Goes to Temp Nurses in Overtime Case Settlement

In recent news, a group of temporary healthcare providers alleged overtime violations. After filing suit (Dalchau et al v. Fastaff, LLC, N.D. Cal., No. 3:17-cv-01584), and gaining class certification, the overtime class action lawsuit was settled. The class members will split about $1.6 million.

The nursing staff company that allegedly violated overtime regulations, will pay $2.75 million to settle the case. The collective action settlement won final approval from a California federal court. The class members include more than 2,750 nurses and technicians across the nation. The members allege that Fastaff LLC did not include housing stipends in their overtime calculations, which is in violation of the Fair Labor Standards Act and California labor law.

Defining Overtime Pay: Overtime pay is compensation paid to an employee who works more than “full time” hours as defined by federal labor law. The rate of overtime pay is calculated by multiplying the regular hourly rate of pay by 1.5. The amount of overtime pay provided to an employee is the overtime pay rate (as previously calculated) multiplied by the number of hours worked over 40 in one week or over 8 in one day.

$1.7 million of the settlement will be split amongst class and collective members, after necessary deductions. Each of the members will receive a payout of approximately $624.  

Lead plaintiffs in the case, Stephanie Dalchau and Michael Goodwin, will receive $10,000 service awards. Counsel will receive $916,000 in attorneys’ fees and $27,700 for reimbursed litigation costs. The hybrid settlement is seen as fair, reasonable, and adequate by Judge William H. Orrick of the U.S. District Court for the Northern District of California. The settlement was granted preliminary approval May 12th, 2019. Orrick determined that appropriate notice was issued to putative class members and no objections were made to the terms of the settlement.

If you are not being paid overtime or if you need to file an overtime lawsuit, we can help. Get in contact with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

Delta Overtime Lawsuit Settled for $3.5 Million

In recent news, Delta Airlines agreed to pay $3.5 million to settle a class action lawsuit including approximately 3,300 former and current Delta employees (Fan v. Delta Air Lines, Inc.). The settlement agreement settles a number of claims made against the airlines including overtime pay violations.

 According to the class action lawsuit, Delta Airlines failed to provide employees with overtime payment as required by California labor law. The employees’ claims were focused around a complicated pay formula that included profit-sharing payments, shift differential pay, non-discretionary bonuses, and the fair market value of employee travel passes.

The Delta overtime lawsuit is a good example of two types of California overtime cases/disputes that have been common recently: 1) claims focused on how hours are counted, and 2) claims focused on how the “regular rate of pay” is determined. The suit also serves as a reminder to employees to check their overtime calculations. Workers should periodically check both elements to ensure they are receiving all the overtime pay they are due. 

Howard Fan, plaintiff, worked customer service for Delta Airlines at the Los Angeles International Airport from September 2010 to August 2018. During his employment with Delta customer service, he regularly paid shift differentials to employees for each hour worked during afternoon and evening shifts. Delta Airlines also provided additional compensation through the company’s incentive program called Shared Rewards. The Shared Rewards program allowed workers to earn cash bonuses if company-wide operations met or exceeded agreed upon goals and metrics in various areas: baggage handling, percentage of scheduled flights that were successfully completed each month, and on-time arrivals. Cash bonuses through Shared Rewards were distributed to employees monthly and were included on wage statements in the pay period during which they were paid. Class members also received compensation from Delta through the profit-sharing plan, and additional compensation in the form of travel pass privileges (Travel Companion Passes for free or reduced-fare travel).

However, shift differentials, incentive program payments, profit-sharing contributions, and the taxable value of any travel passes, were not included when calculating the employees’ regular rate of pay that was used as the basis for overtime pay calculations. According to California law mirroring the federal Fair Labor Standards Act (FLSA), the “regular rate of pay” includes “all remuneration for employment paid to, or on behalf of, and employee.” Employees in the case argued that Delta was violating labor law by failing to include all compensation provided to employees into their regular rate of pay.

If you need to discuss violations of overtime pay requirements or if you need to file an overtime lawsuit, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

California Safeway Cashier Suit Ends with $12 Million Deal

Did you know that Safeway has recently agreed to pay $12 million to resolve a lawsuit filed by one of their cashiers? The lawsuit alleged Safeway failed to provide seats to cashiers at their California grocery stores, which is in violation of California state law(Sharp v. Safeway Inc., No. 2011-1-CV-202901 (Superior Ct. of Calif., County of Santa Clara, Oct. 21, 2019)).

According to California labor laws, employers must generally provide employees with “suitable seating” if the nature of their job duties permit sitting. Safety argued that they truly believed, in good faith, that the nature of a cashier’s job did not reasonably permit sitting. While the court decertified the class in the case, the settlement still has a wide impact. It is estimated that Safeway may need to provide seats for up to 30,000 cashiers at different California stores over the next two years in order to comply with the terms of the settlement agreement. This requirement is in addition to the agreed upon monetary sum.

This case is an example of when a non-compliant policy that affects a large pool of employees can turn a seemingly small issue into a massive issue. And this type of massive issue can turn into a big, expensive problem for the employers involved. This is a frequent scenario with wage and hour mistakes by employers.

Other Examples of “Small” Compliancy Mistakes that Can Turn Into Expensive Problems for Employers:

1. Auto-deduct Policies – they become an issue when employees work through planned breaks.

2. Pre- and Post-Shift Work – Failing to pay employees for off the clock work necessary to their job duties can result in expensive wage and hour claims.

3. Miscalculated Overtime – miscalculated overtime adds up quickly.

If you need to discuss discrimination in the workplace or if you need to file a discrimination lawsuit, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

Are Uber Drivers Owed Millions of Dollars Due to Wage Theft?

Did you know that rideshare drivers in New York City have filed a lawsuit against Uber? The lawsuit claims that Uber wrongfully deducted taxes from divers’ paychecks and did not provide them with the full income they earned from their rides through the popular ridesharing app. The suit was filed in a U.S. district court in Manhattan.  

According to the lawsuit, 96,000 drivers are owed money because of two employment law violations: 1) Uber allegedly deducted money from drivers’ paychecks for both the state’s sales taxes and 2) a surcharge intended to apply to rides across state lines. Uber drivers also claim that the contract they have in place with the popular ridesharing company requires that Uber pay the driver the passenger’s full fare minus Uber’s service fee. According to the drivers, Uber also used a manipulative system of charging passengers that had the passenger paying a higher fare than what was reported to the driver, and Uber pocketed the difference between the indicated fare and the actual (higher) fare. This practice denied the drivers their contractual share of the full fare being charged to customers.

According to the allegations, it is estimated that the drivers are owed around $5 million.  

There are three Uber drivers named in the suit:

• Levon Aleksanian

• Sonam Lama

• Harjit Khatra

The plaintiffs listed in the lawsuit asked a federal judge to approve the class action for close to 100,000 drivers affected by the alleged violations. This lawsuit is part of a wave of employment lawsuits aimed at rideshare companies and other gig economy companies that are attempting to bolster wages of workers. Uber and Lyft were initially applauded for disrupting a stale industry, but in recent news they’re receiving more attention for the potential their business models present for worker exploitation.

Other companies facing similar allegations include: Instacart, DoorDash, etc. All of which have business models that rely on their workers using their app. These app-based gig economy businesses are drawing significant criticism in recent years for pocketing funds that should go to their drivers (i.e. deducting customer tips from payments submitted, etc.)  

In California, Governor Gavin Newsom recently signed a state bill into law after months of organizing by rideshare drivers and supporters. The new legislation attempts to force companies like Uber and Lyft to classify their workers as employees and provide them with access to a wider range of rights and protections. According to trusted media sources, various gig economy companies including Uber, Lyft, DoorDash, Postmates, and Maplebear spent a combined $110 million fighting the law.

If you need to file a wage theft lawsuit or if you need to discuss other employment law violations, don’t hesitate to get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.