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Battle Over Lyft Driver Misclassification, Unpaid Benefits Advances to the Courts

lyft app on phone

The New Jersey Department of Labor and Workforce Development has advanced its worker misclassification case against Lyft by asking an Administrative Law Judge to determine whether Lyft drivers are employees rather than independent contractors.

The announcement, made on March 7th, follows a 4-year audit in which the DOL assessed that the rideshare company failed to properly classify drivers as employees and pay employer contributions for unemployment, disability, and family leave, among other benefits.

Transferring the case to the courts will have big implications:

  1. If the Court determines that drivers are employees, Lyft would be responsible for unpaid employer contributions plus penalties and interest for the years 2014 - 2017 in the amount of $16 Million dollars.
  2. Most importantly, if the Court were to determine that Lyft drivers are employees, drivers would be entitled to medical treatment, temporary disability, and permanency benefits should they get hurt in the course of their employment under New Jersey Worker’s Compensation law.

The decision may also impact how many other employees that currently engage in “gig” employment, such as drivers for Uber, Doordash, and other similar jobs. To date, the New Jersey Supreme Court has yet to make a clear ruling on whether these types of jobs create an employment relationship, but has been very clear that worker’s compensation laws are intended to be social, remedial legislation intended to help people when they get hurt at work.

Currently, the Courts evaluate employment by a myriad of factors, including how much control the employer has, whether the service being performed is within the usual course and place of the employer, and how much the individual depends on the job for their income, among other factors. For the time being, Workers’ Compensation judges have wide discretion to determine whether an employment relationship exists.

If you have been injured at work, whether your employer considers you an independent contractor or not, contact the attorneys at Levinson Axelrod, P.A. Our firm has been fighting for injured workers across New Jersey since 1939 and can help you learn more about your rights to workers’ compensation benefits. Call (732) 440-3089 or contact us online.