California strikes again. This is the state that boldly told Uber that the drivers aren't independent contractors but employees. That flipped all kinds of things upside down.
THE CALIFORNIA SUPREME Court dealt a major blow to the gig economy on Monday in a decision that will have far-reaching effects not just for the likes of Uber and GrubHub, but for many different types of employers.
The court ruled that employers must treat workers who do work related to a company's "usual course of business" as full-fledged employees. For example, if a store hires a plumber to fix a sink, that plumber wouldn't need to be considered an employee because the store isn't in the plumbing business. But if a clothing company paid someone to sew clothes at home, then that person should be considered an employee, entitled to minimum wage, breaks, and other benefits of employment.
The case only directly applies to delivery company Dynamex, but it sets a precedent that could affect many types of workers in California, including care givers, dog walkers, hair stylists, and, of course, drivers for Uber and other gig economy companies, says Eve Wagner, a founding partner of Sauer & Wagner LLP with a background in employment law.