Independent contracting will continue to be a risky proposition in 2017. Last year, FedEx settled class actions brought by drivers in over 20 states by paying around $255 million. That is a pay check that will continue to motivate plaintiffs’ lawyers to look for misclassified independent contractors.
Nonetheless, the newest chapter in Uber’s saga demonstrates that it is possible to structure a compliant independent contractor relationship. On February 1, a Florida appellate court ruled that Uber drivers qualified as independent contractors and thus were not eligible for unemployment, concluding that the drivers had “contractually agreed” that the “work did not make him an employee.” The court found that a “review of the parties’ working relationship confirms this understanding. Due in large part to the transformative nature of the Internet and smart phones, Uber drivers … decide whether, when, where, with whom and how to provide rides using Uber’s computer programs. This level of free agency is incompatible with the control to which a tradition employee is subject.”
The decision is in sharp contrast with 2015 decisions in California finding Uber drivers to be employees – bringing the significant differences in state IC laws into focus. Florida courts, for example, generally give more weight to the intent of the parties than California courts. California courts give more weight to factors such as economic dependence and “integration” (that is, whether the work performed by the IC is a core function of the business). The logic tests under the hood of CHR Navigator IC apply these differences – not only in the statutory and regulatory tests, but based on an analysis of how courts have weighed the various factors.
The lesson here is that the potential liability risk of engaging independent contractors requires careful review of the relationship and the potential contractor — both of which can be accomplished quickly and reliably with our Navigator IC app.
