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By March 8, 2016Blog

In the ongoing conflict between employers and government regulators over exactly who can be a contracted employee and who cannot, the California Employment Development Department (EDD) continues to poke holes in Uber’s belief that its drivers are contractors. 

According to SF Weekly, last month Patrick Ely applied for unemployment benefits after he lost his access to Uber’s app. Ely had driven for Uber for more than a year making more than $50,000 annually. However after Uber lowered its rates, Ely found he was making less than half as much money for driving the same hours. He then joined a lawsuit against Uber, alleging violations of California labor law. After joining that lawsuit, Ely says he was no longer able to access Uber’s app.

Ely then filed for unemployment benefits, and had his application approved. An attorney for Ely told SF Weekly that a large part of the EDD’s decision was determining how much control Uber had over Ely’s work. explains,

The amount of control an individual or a company has over the worker’s job is an important factor in determining whether a person is an independent contractor or an employee. Independent contractors have more authority and discretion in their job; they are able to set their own rates, determine their working conditions and control their hours. Employees are under greater control of the company they work for. The company generally controls their pay (or the amount charged), the hours worked and the working conditions. The company can also fire an employee at any time.

The ruling by the EDD may signal that Uber is losing their fight to define their drivers as independent contractors and not employees.

“We disagree with the decision,” San Francisco-based Uber wrote in a statement addressing Ely’s award, “but, since it only affects one person, and does not have any wider impact or set any formal or binding precedent, we continue to focus on the bigger picture: the O’Connor case.”

(The above mentioned O’Connor case is a class action lawsuit filed by Uber drivers in California federal court against Uber. VentureBeat has more details about the lawsuit here.)

Uber’s claim that this is a one-off unemployment benefits decision is incorrect.

WIRED reported in September 2015 that the California EDD had extended unemployment benefits to a California Uber driver that pre-dates the Ely case.

When responding to that case an Uber spokesperson gave WIRED a similar statement as issued to the SF Weekly, “We disagreed with the decision, but since it only affects one person …we decided to focus on the bigger picture.”

WIRED is reporting that unemployment cases against Uber are building not just in California but across the country.

This latest decision is not the first time a state agency has determined an Uber driver was an employee. In May [2015], the Florida Department of Economic Opportunity found that Uber driver Darrin McGillis was an Uber employee and thus eligible for unemployment insurance. In June [2015], the California Labor Commission, which investigates wage claims, decided that ex-Uber driver Barbara Ann Berwick was entitled to unpaid wages and reimbursement for business expenses in the nine weeks she worked as an Uber driver last year.

Whatever the results of the cases against Uber end up being, all of the above is a clear reminder for employers to remain focused on the differences between independent contractors and employees. The line between the two continues to shift with every new court case.

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