By Andrew Schreiber | Employment Law, Workers Compensation
In Pennsylvania, in an Uber Driver an employee of Uber or independent contractor?
The legal distinction between classifying a worker as an employee or independent contractor has been highly contested. Giving particular significance to this debate was the emergence of ridesharing platforms like Uber and Lyft. These companies have litigated this specific issue, maintaining that individuals who drive for their platforms are independent contractors. In response, some drivers have challenged this classification and argued that they should be deemed employees. These workers have fought for the employee classification because there are several advantages to being deemed an employee, including the eligibility for workers compensation, unemployment benefits, and other labor law protections. For example, in workers compensation law, if you are injured while on the job, but are an independent contractor, you are not entitled to workers compensation benefits from your agency or company. If you were deemed an employee however, you would be so entitled.
So how is a worker classified? In Pennsylvania, there is a rebuttable presumption that a worker who performs services for which he or she is paid is an employee. Pursuant to 43 P.S. § 753(l)(2)(B), the burden is on the employer to rebut this presumption by satisfying the two conditions set forth below.
- The individual has been and will continue to be free from control or direction over the performance of the services involved, both under his or her contract of serve and in fact, and
- As to these services, the individual is customarily engaged in an independently established trade, occupation, profession, or business.
Subsection 1. is referred to as the “Right to Control Test” and consists of several factors that the court will weigh. These factors include the control in which the work is done, the skills required for performance, which party supplies the equipment, the rights of termination, and the manner in which the work is to be performed.
Pennsylvania has not definitively classified Uber and Lyft drivers as employees. However, nearby states including New Jersey and New York have found Uber and Lyft drivers to be employees. Hope of an employee classification is further evidenced in the 2020 Supreme Court of Pennsylvania case of Lowman v. Unemployment Compensation Board of Review. There, the plaintiff Mr. Lowman was laid off from his job, and like many others, turned to driving for Uber to support himself. The Court considered whether by driving for Uber, Mr. Lowman was engaging in “employment” or “independent business.” The Court directly applied the tests discussed above and found that Mr. Lowman was “not free from control and direction by Uber and was not engaged in an independently established business.” Accordingly, the Court ruled that Mr. Lowman was engaged in employment and thus entitled to unemployment benefits. It is important to understand that this case did not directly address the specific employee classification issue, but the Courts ruling provides hope for change because the Court’s analysis raises the same issues and tests for employee classification. It provides hope that Pennsylvania will follow in the footsteps of other states, deeming Uber and Lyft drivers to be employees under the law.
WARNING: THIS IS A GENERAL DISCUSSION OF THE LAW AND IS NOT TO BE LEGAL ADVICE. FOR ANY LEGAL QUESTIONS PLEASE CONTACT OUR OFFICE AND SPEAK TO AN ATTORNEY.