Florida: Uber Drivers Are Contractors, Not Employees

By December 21, 2015

DBR 2
 
 
Uber sticker on a parked car on Capitol Hill in Washington, D.C.  September 4, 2015.  Photo by Diego M. Radzinschi/THE NATIONAL LAW JOURNAL.
Uber drivers in Florida will be considered independent contractors rather than employees, the Florida Department of Economic Opportunity determined Thursday in a victory for the app-based ridesharing company.
The order reverses an earlier state decision and marks Florida’s stance in a debate facing government agencies and courts across the country as Uber becomes ubiquitous.
“Technology is allowing hundreds of thousands of people to go into business for themselves,” DEO Executive Director Jesse Panuccio wrote in his decision. “Those in business for themselves may not have the same guarantees and benefits of those in the employ of others, but there are many other benefits of being your own boss. … Technological advances are opening up that dream to many more people, and we should not malign (or perhaps misclassify) that trend as worker misclassification.”
An independent contractor designation means the San Francisco-based company can avoid paying drivers’ unemployment benefits, workers’ compensation and other employee-related costs such as hourly wages.
The classification is also central to the company’s business model, allowing drivers to set their own hours and use other ridesharing apps such as Lyft.

“This decision recognizes that Uber’s partners are independent contractors who use Uber on their own terms,” Uber said in a statement. “They control their use of the app, deciding when and for how long they drive, and whether they drive at all. Nearly 90 percent of drivers say the main reason they use Uber is because they love being their own boss.”
Uber has persuaded 11 other states to classify the company’s drivers as independent contractors: Arizona, California, Colorado, Georgia, Illinois, Indiana, New York, Pennsylvania, Texas, Utah and Virginia.
Labor and employment attorney Brett Schneider said the decision is a victory for Florida businesses in general — although employers should be cautious about assuming the department’s order would apply the same way to their own workers.
“I don’t know how far-reaching the implications of that order are going to be, because Uber is such a unique animal,” said the Weiss Serota Helfman Cole & Bierman partner in Fort Lauderdale.
He said businesses that don’t carefully consider their decision to treat workers as independent contractors could find themselves on the losing side of a wage-and-hour claim because they haven’t kept track of hours worked, for example.
“I always advise my clients, when in doubt, to classify as employees rather than independent contractors because there’s a lot of risk” if the workers are misclassified, he said.
The department’s decision was refreshing for Miami labor attorney Michael Landen, who represents a company similar to Uber in an employment dispute.
That’s because the order focused on how the parties related to each other on a day-to-day basis, rather than the argument that Uber could not exist as a business without drivers.
“Uber is no more an employer to drivers than is an art gallery to artists,” Panuccio said in the order.
Landen, a Miami partner at Kluger, Kaplan, Silverman, Katzen & Levine, said he hopes the state will continue to examine practical relationships between companies and workers, particularly as technology changes the way businesses operate.
“What will become interesting is where Florida decides to go from here and whether it decides it’s going to be more progressive in how it approaches this issue given the changing landscape,” he said.
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