AG HEALEY: UBER AND
LYFT DRIVERS ARE EMPLOYEES UNDER MASSACHUSETTS WAGE AND HOUR LAWS
Files Lawsuit to Ensure
Drivers Have Access to Minimum Wage, Overtime, Earned Sick Time and other
Benefits
BOSTON – Attorney General Maura Healey today announced a
lawsuit seeking a court ruling that Uber and Lyft drivers are employees under Massachusetts Wage and Hour Laws, a designation that will allow drivers access to
critical labor rights and benefits, such as minimum wage, overtime, and earned
sick time.
In the complaint for declaratory judgment, filed in Suffolk Superior
Court against Uber Technologies Inc. and Lyft Inc., AG Healey seeks a
determination from the court that Uber and Lyft drivers are employees, not
independent contractors as the companies have misclassified them. The AG’s
complaint also seeks an order declaring that these drivers are entitled to
protections under the Wage and Hour Laws.
“Uber and Lyft have built
their billion-dollar businesses while denying their drivers basic employee
protections and benefits for years,” said AG Healey. “This business model is
unfair and exploitative. We are seeking this determination from the court
because these drivers have a right to be treated fairly.”
The AG’s Office alleges that
Uber and Lyft are unable to meet a three-part test under state law that would
allow them to classify drivers as independent contractors. In Massachusetts, a
worker who provides any service for another party is presumed to be an employee
and may not be classified as an independent contractor unless that party can
prove:
·
The worker is
free from their direction and control;
·
The services the
worker performs are outside the usual course of their business; and,
·
The worker is customarily
engaged in an independently established trade, occupation or business of the
same nature as the service performed for the party.
According to the AG’s
complaint, Uber and Lyft drivers are not free from the companies’ direction and
control. Drivers must enter into standardized service agreements that set the
companies’ non-negotiated terms and conditions, performance standards, and
forced arbitration provisions that prevent drivers from bringing private
litigation to enforce their rights under the state Wage and Hour Laws. Uber and
Lyft claim drivers set their own schedules and may choose to work as many or as
few hours as they wish, yet they closely monitor drivers’ activities through
their apps and offer financial incentives to induce drivers to work shifts that
directly benefit the companies. Uber and Lyft may also penalize drivers for not
accepting enough rides, cancelling too many rides, failing to maintain customer
satisfaction ratings, or engaging in any conduct the companies determine to be
grounds for suspension or termination. Uber and Lyft also unilaterally
determine their drivers’ pay structure, which is calculated using complicated
formulas that change frequently.
The AG’s complaint asserts
that Uber and Lyft drivers provide a service that is essential to the
companies’ core business as transportation service providers, and without their
drivers, these companies would cease to exist. Moreover, Uber and Lyft drivers
are not engaged in an independently established occupation or business. The
drivers are not true independent entrepreneurs with the ability to grow their
businesses using their individual abilities, and Uber and Lyft directly rely on
and benefit from their fare volume under the companies’ required fee-splitting
arrangements.
By misclassifying drivers as independent contractors, Uber and Lyft deny their
drivers basic protections under the Massachusetts Wage and Hour Laws. Many
drivers are not even guaranteed the state minimum wage or overtime because the
companies don’t pay them for time spent between rides or reimburse them for
necessary business expenses such as fuel, vehicle maintenance, and insurance.
The companies only recently began offering drivers temporary paid leave due to
the COVID-19 pandemic, but even these new policies fail to comply with the
Massachusetts Earned Sick Time Law. And drivers who think they were
wrongly suspended or terminated cannot challenge those actions in court because
their service agreements require them to go to arbitration.
Uber and Lyft both generate
billions of dollars of revenue each year. The companies announced plans to
spend $100 million to upend a California law that protects workers from
misclassification. Yet these companies deny their drivers access to the most basic
wage protections under state laws.
In seeking a declaratory judgment, the AG’s Office asks the court to order Uber
and Lyft to reclassify their drivers as employees, making available to them the
benefits and protections afforded by the Massachusetts Wage and Hour Laws,
including those granted by the Wage Act, Minimum Wage Law, Overtime Law, Earned
Sick Time Law, and Anti-Retaliation Statutes.
The AG’s Office encourages
Uber and Lyft drivers who believe their rights under the Wage and Hour Laws
have been violated to respond to the AG’s
complaint. Read more about the
three-part employment status test on the AG’s website. For information about the Massachusetts Wage and
Hour Laws, workers may call the Office’s Fair Labor Hotline at (617) 727-3465
or go to the AG’s Workplace Rights website www.mass.gov/ago/fairlabor for materials in multiple languages.
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