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9 min read

    9 min read

    Last month, more than 100 Uber and Lyft drivers filed wage claims with the Labor Commissioner’s Office in California asking to be reclassified as employees and receive three years worth of back pay. In this article, senior RSG contributor Sergio Avedian will explain how to file a wage claim as well as its pros and cons.

    Updated March 2020: Rideshare Drivers United has made this process a lot easier for us! View the video and instructions below for more information.

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    I have written a lot about AB5 in the past, and on its direct effects to Uber and Lyft drivers. As of January 1, 2020, it is the law in California separating what an Independent Contractor (IC) is from an Employee.

    As rideshare drivers, we all have to be considered employees of app based gig economy companies, since they fail the ABC test on all counts.

    However, Uber and Lyft have largely ignored these facts and are fighting against this law by collecting signatures for a ballot initiative to repeal it during the 2020 general elections. Will they be successful spending $60 million for their campaign? Time will tell.

    Until then, over 100 drivers for app based gig economy companies took the matter into their own hands by filing individual wage claims against Uber and Lyft on a retroactive basis, dating back three years, with some full time drivers’ claims easily reaching into six figures.

    If you’d like to see how much you are potentially owed by Uber and Lyft, take a look at Potter Handy’s damages calculator here.

    In addition, the Los Angeles based driver group Rideshare Drivers United (RDU) has been spearheading efforts to simplify the application process for all drivers to file wage claims. Visit their website if you want to learn how to file your own wage claim!

    What is a Wage Claim and Who Should File One?

    California law AB5 permits employees to enforce their wage and their rights by filing a complaint with California’s Division of Labor Standards Enforcement (the DLSE). The wages and hours of California employees are protected by both state and federal law.

    Those laws, however, don’t enforce themselves, especially if the employer disregards it. When labor laws are violated, many workers choose to file a wage claim.

    Related: 600,000 Reasons Why I’m Suing Uber and Lyft

    A wage claim is a type of complaint that workers can file against their employer (or former employer) to recover money they are owed. They provide a simple process for workers to legally prove they are entitled to pay.

    According to the State of California Department of Industrial Relations, the Labor Commissioner’s Office has no jurisdiction over Independent Contractors. Some workers who are misclassified as independent contractors are not provided basic labor rights.

    If you believe your employer is misclassifying you as an independent contractor, file a wage claim. The Labor Commissioner’s Office may hold a hearing to determine if a worker has been misclassified as an independent contractor.

    When a wage claim is filed, the Labor Commissioner’s Office investigates the claim to determine if any wages or benefits are owed. In most cases, a settlement conference between the employee and employer is scheduled to resolve the issues.

    If the issues are not resolved at the conference, a hearing is scheduled so a hearing officer can review the evidence and make a decision on the claim.

    Options Available to Rideshare Drivers

    Employees who want to recover money for violations of wage and hour laws have options. The most obvious is to raise the issue with their employer and resolve it informally.

    Often, however, employers don’t want to meet their legal obligations. When employers fail to pay their employees’ wages in full and on time, employees usually have three choices:

    • File a lawsuit in court,
    • File a wage claim with a federal agency, or
    • File a wage claim with California’s Division of Labor Standards Enforcement (the “DLSE”).

    For many employees, a wage claim with the DLSE is the easiest or best option.

    Civil Lawsuits

    Employees who have been unlawfully underpaid have a right to file a lawsuit in court to seek the money they’re owed. Lawsuits in California usually take place in the Superior Court. These lawsuits are different than wage claims, which are normally handled outside of court.

    However, the two approaches have similarities. Both lawsuits and wage claims involve conferences and hearings at which evidence can be presented and legal arguments made. But lawsuits are a more formal process and can be costly, complicated, and time-consuming.

    Wage claims, on the other hand, are designed to reduce an employee’s risks and costs. It usually doesn’t make sense to file a lawsuit in court for smaller claims.

    Federal Wage Claims

    On the federal level, the Fair Labor Standards Act (the “FLSA”) controls workplace rules that apply nationwide. It sets minimum standards employers must follow like the federal minimum wage.

    Like California’s Labor Code, the FLSA provides a procedure for employees to pursue a wage claim with an administrative agency. The Wage and Hour Division of the Labor Department handles such claims.

    In many cases, pursuing a claim under the FLSA is less desirable than a claim brought under California Labor Code. California usually (but not always) provides broader protections for employees than federal law.

    Wage Claims with the Division of Labor Standards Enforcement (DLSE)

    In addition to federal protections, employees in California are protected by the Labor Code and regulations written by state administrative agencies. Those laws cover matters like:

    • The time and manner of paying wages,
    • Minimum wage requirements, and
    • Mandatory overtime pay

    Through the wage claim process, the DLSE has the power to investigate and hold a hearing on employee complaints about violations of these laws and regulations. The DLSE can decide any question that is within its jurisdiction.

    Which Option is Best?

    Choosing how to proceed is often the first important decision in a case. Employees usually cannot pursue multiple forms of relief.

    Employees may choose the wage claim process with the DLSE for several reasons:

    • It can be cheaper, faster, and less risky than a traditional lawsuit.
    • The DLSE has the power to issue subpoenas that compel witnesses to attend hearings.
    • The DLSE can force employers to produce documents.
    • The DLSE can issue citations to employers and require them to pay penalties.
    • Employees can hire a lawyer to represent them at DLSE hearings.

    The main downside to filing a wage claim with the DLSE is that employees usually cannot recover attorney fees in a wage claim with the DLSE. In a lawsuit, on the other hand, that is sometimes possible depending on the type of claim the employee is bringing.

    Ultimately, the best course of action will depend on the specific facts of the employee’s situation. It is often a good idea to speak with a qualified employment lawyer before deciding how to proceed.

    RIdeshare Drivers United (RDU) is Trying to Simplify the Process

    I spoke to Nicole Moore (RDU Organizer) in length about this subject, she was very clear about where she stands regarding AB5, Uber and Lyft.

    “This is our opportunity to not only get the money that they’ve taken from us, that are due to us under California Labor Law, but it’s also about all our future work – we need the state and the cities we work in to help enforce this law for our past and future earnings.”

    Besides having a full time job, Nicole drives for Lyft for one day a week to bridge her income gap. As a part-time driver, she was curious about the process, so she filed a wage claim of her own.

    Luckily for us, RDU has made it a lot simpler to file a wage claim. They’ve even made a video, walking you through the wage claim process. Take a look below:

    You can get started through the RDU wage claim portal here.

    If you’re going to file for a wage claim, it pays to know how much you are owed.

    According to the firm, Potter Handy, that RSG contributor Jay Cradeur engaged with, there are several components to “back pay.”  They are:

    • Overtime Premium Pay (Anything over 40 hours in a week, or over 8 hours in a day)
    • Non-Productive Time Wages (Period 1 and 2, getting gas, finding a Starbucks bathroom)
    • Mileage Expense (Huge!)
    • Meal Period and Rest Period Reimbursement
    • Unreimbursed Business Expenses (All the things we buy for our business)

    That can add up quickly, especially if you have been a full-time driver like I have been. The Potter Handy website has a damages calculator that you can use to get an estimate.

    Jay used the Potter Handy calculator to determine that Uber and Lyft owe him over $600,000 in back pay!

    In addition to filing a wage claim, you can also go the arbitration route and sue Uber and Lyft that way. Learn more about how to go the arbitration route here.

    A Successful Wage Claim Outcome

    I was on Twitter (@sergioaved) the other day and received a DM from an Uber driver in Washington, DC. He said he beat Uber in court and had the cancelled check to show for it.

    Tony was happy to share his story with me and here it is in his own words, HE BEAT GOLIATH!

                                                                                                                           

    According to Tony, Uber didn’t pay for 30 hours of work due to a banking error. He ended up taking them to small claims court for what he was owed.

    After a year, and countless back and forth with a dismissive Uber representative, Uber didn’t show during the trial. Since it was a no show, and since Tony had prepared his case so well, the judge came down in favor of Tony and he was awarded the amount shown above ($715.87).

    Takeaways for Filing a Wage Claim

    If I can sum it up: learn your rights. Uber and Lyft may think drivers are desperate, powerless, and that they can get away by ignoring drivers’ rights when it comes to the labor laws of the country or not paying drivers on a timely manner for referrals and even weekly earnings.

    Don’t be afraid! I fully understand drivers’ concern of retaliation by deactivation. However, we are a country of laws, and while not one company should be above the law, unfortunately with billions comes arrogance and power. There are millions of Nicole and Tonys out there, they are fighting for themselves but also for the future of all rideshare drivers’ rights!

    Drivers, do you think you’ll pursue a wage claim against Uber or Lyft?

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    -Sergio @ RSG

    Sergio Avedian

    Sergio Avedian

    Sergio has been driving Uber and Lyft for about three years. He has over 4500 rides on both platforms, mostly on Uber. Sergio has a degree in finance, and worked on Wall St. for over eighteen years. In his free time, he still trades stocks and derivatives for himself and a few friends. He is also a PGA certified golf instructor, teaching golf is his passion. Sergio is married with two wonderful kids who take the rest of his afternoons/weekends between their soccer practices and golf tournaments.

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