Uber pays $100 million to settle class action lawsuits

What is the future of Uber drivers and Michigan workers’ compensation?

The Wall Street Journal is reporting that Uber has settled two class action lawsuits for a $100 million. This ends current litigation in California and Massachusetts about whether its drivers should be classified as independent contractors or employees.

According to Law 360, Michigan has now seen its first lawsuit against the ride sharing service. Two Uber drivers have filed in the U.S. District Court for the Eastern District of Michigan alleging employee misclassification.

We find these lawsuits fascinating because it shows how technology is changing traditional notions about employment. Independent contractors get none of the protections that employees receive under workers’ compensation. This means Uber drivers are on their own if they suffer a workplace accident.

Amendments to Michigan’s Workers Disability Compensation Act in 2011 changed who is thought to be an employee. On and after January 1, 2013, services are employment if the services are performed by an individual whom the Michigan Administrative Hearing System (MAHS) determines to be in an employer-employee relationship using IRS revenue ruling 87-41. This requires a weighing of 20 common law factors with a focus on direction and control.

Michigan law has always been somewhat confusing when it comes to independent contractor status. We are not sure how the Michigan litigation is going to end. However, we are certain that new rules are needed to protect Uber drivers and encourage business innovation.

Michigan Workers Comp Lawyers never charges a fee to evaluate a potential case. Our law firm has represented injured and disabled workers exclusively for more than 35 years. Call (855) 221-2667 for a free consultation today.

Related information:

What’s the big deal about employee misclassification?

Photo courtesy of Creative Commons, by ClearFrost.

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