On July 22, 2019, the Ninth Circuit withdrew its recent decision in Vazquez v. Jan-Pro Franchising International, Inc., and ordered that it would certify to the California Supreme Court the question of whether the worker classification test articulated in Dynamex Operations West v. Superior Court applies retroactively. READ MORE
On June 13, 2019, the Council of the European Union (EU) adopted the European Parliaments proposal for a Transparent and Predictable Working Conditions Directive – a direct follow-up to the proclamation of the European Pillar of Social Rights. The new law introduces new minimum rights, as well as new rules on the information to be provided to workers about their working conditions. READ MORE
The battle between Dynamex and Borello continues. Two competing bills – Assembly Bill 5 (“AB 5”) and Assembly Bill 71 (“AB 71”) – each seek to codify the respective worker classification tests. On May 29, 2019, the California State Assembly overwhelmingly passed AB 5, a bill seeking to codify Dynamex Operations West, Inc. v. Superior Court of Los Angeles, which adopted the three-factor “ABC” test to determine a worker’s classification for wage order claims. Now the bill is headed to the state Senate. Meanwhile, AB 71, a bill seeking to codify S.G. Borello & Sons, Inc. v. Dept. of Industrial Relations, has thus far not enjoyed the same success. READ MORE
On April 29, 2019, the U.S. Department of Labor (“DOL”) issued an opinion letter finding that “on-demand” service providers working for a virtual marketplace company are independent contractors under the Fair Labor Standards Act.
The opinion letter comes almost two years after the DOL withdrew informal guidance on independent contractors issued under the Obama administration, in which the DOL concluded that “most workers are employees under the FLSA.” The new opinion letter signals an approach more friendly to “gig economy” virtual marketplace companies (or “VMCs”), online and/or smartphone-based referral services that connect consumers with service providers providing a wide variety of services, such as transportation, delivery, shopping, moving, cleaning, plumbing, painting, and household services. READ MORE
Further to the reclassification of the service agreement between an independent deliveryman and Deliveroo, ordered by a Spanish lower Court, French jurisdictions recently shifted position, considering that several independent workers should be deemed employees of the platform that they were working for. READ MORE
As has been widely reported, last month the California Supreme Court issued a decision in Dynamex Operations West, Inc. v. Superior Court of Los Angeles that rejected the long-standing, multi-factor test to determine whether a worker is an employee. The Dynamex decision established a three-factor “ABC” test that, on its face, places the entire burden of showing that a worker is not an employee squarely upon the hiring party. The ABC test asks whether:
- The worker is free from the direction and control of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact;
- The worker performs work that is outside the usual course of the hiring entity’s business; and
- The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.
The Second Circuit has affirmed the dismissal of a class action of New York City “black car” drivers who alleged they were misclassified as independent contractors by their dispatchers. In reaching its ruling, the Court found that multiple factors of the economic realities test weighed against employee status for the drivers.
Black car drivers provide rides to high-end clientele, such as business executives, celebrities, and dignitaries. In 2012, a class of drivers sued Corporate Transportation Group Ltd. and a number of its affiliates (collectively, the “dispatchers”) alleging they were misclassified as independent contractors in violation of the FLSA and New York Labor Law. After originally granting conditional class certification, the U.S. District Court for the Southern District of New York granted the dispatchers’ motion for summary judgment, concluding the drivers were properly classified as independent contractors under both statutes. READ MORE