Dive Brief:
- In a decision that some Uber drivers and workers’ unions are calling “monumental,” a British tribunal ruled that Uber must pay drivers 21 and over the minimum wage in addition to holiday compensation, reports Fortune.
- Two drivers brought their case before the tribunal last July, arguing that Uber treated them like self-employed workers instead of employees and that they were entitled to the same benefits as employees, including minimum-wage pay, according to the report. Uber plans to appeal the ruling. Some workers reacting favorably to the verdict have decried the concept of self-employment, with one source in the report calling the idea "bogus."
- The tribunal’s judges ordered Uber to pay drivers Britain’s minimum wage of 7.20 pounds an hour, or $8.80 in U.S. currency. The judges also ruled that passengers' fees start the minute drivers sign onto the app. Lawyers representing the plaintiffs are calculating how much back pay in holiday time Uber owes their clients.
Dive Insight:
The case could have both positive and negative repercussions for the “gig” labor force, whose members work for different employers, largely independently and without contracts. Drivers quoted by Fortune in this case said they were drawn to Uber because of the flexible work hours it offers, and others said they were cheated out of fees.
Uber’s case rekindles the employee versus contractor debate. The Dept. of Labor, in accordance with FLSA, has stringent rules on not treating contractors and other contingency workers like employees, based on such criteria as how they’re supervised or in what workplace activities they may participate. Employers must have policies and practices that comply with the law if they want to avoid costly back-pay entitlements, legal fees and fines.
The tribunal’s decision won’t likely end in Great Britain, or with Uber. Companies across industries and locations use contractors. A wise tactic is to look out for more fallout from the case and to monitor Uber’s court appeal.
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