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The status of Uber and Lyft gig workers depends on the Massachusetts court battle

The status of Uber and Lyft gig workers depends on the Massachusetts court battle

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By Nate Raymond

BOSTON (Reuters) – Massachusetts has become the latest front in a years-long dispute across the United States over whether Uber and Lyft ride-share drivers should be treated as independent contractors or as employees entitled to benefits and wage protections.

The state's highest court on Monday will hear the question of whether to allow voters in November dueling ballot measures that would improve the relationship between app-based drivers and companies like Uber, Lyft, Instacart and DoorDash, whose companies help Boosting the gig worker would redefine the economy.

An industry-backed proposal would treat app-based drivers from these companies as independent contractors entitled to some new benefits, but make it clear they are not employees. A worker-backed proposal would allow Uber and Lyft drivers to unionize.

Uber and Lyft are also preparing to go to trial on May 13 in a civil lawsuit filed in 2020 by Maura Healey, the state's then attorney general and now Democratic governor. Massachusetts accuses the companies of improperly classifying their drivers as contractors in order to avoid treating them as employees entitled to minimum wage, overtime and earned sick time.

If the industry fails in court and at the ballot box, Uber and Lyft face a major overhaul of their business models. Uber's lawyers said in court filings that such a change could force the company to limit or stop service in Massachusetts.

A victory for companies in a state with some of the most worker-friendly laws could give them encouragement in other states, labor activists say.

“In Massachusetts, the eyes of the country will be on us this year – and especially in November – because this is the starting point for this fight,” said Shannon Liss-Riordan, a lawyer who has litigated lawsuits against Uber and Lyft across the country. he said Tuesday at an event on the voting issues.

Uber and Lyft have pushed back against claims that their drivers should be classified as employees because the companies have significant control over working conditions. The flexibility of gig work and drivers' ability to work for competing applications are hallmarks of independent contracts, according to the companies and their allies.

THE COST OF EMPLOYEES

According to various studies, employees can cost companies up to 30% more than independent contractors. By not classifying their drivers as employees, Uber and Lyft avoided paying $266.4 million over 10 years for workers' compensation, unemployment insurance and paid family leave in Massachusetts, the state's Democratic auditor said in a statement Tuesday published report.

In a $200 million campaign in 2020, Uber, Lyft and others persuaded California voters to pass a measure similar to the Massachusetts companies to establish drivers as independent contractors with some benefits. The legal dispute against this measure is not yet over.

There were also disputes about the rights of drivers elsewhere. In New York, for example, Uber and Lyft reached a $328 million deal with the state's Democratic attorney general in November to resolve allegations that they cheated their workers out of pay.

In that settlement, the companies agreed to implement a minimum wage floor and paid sick leave, similar to the industry-backed proposal in Massachusetts.

Uber, Lyft, DoorDash and Instacart have given millions of dollars to an industry-backed ballot panel called Flexibility and Benefits for Massachusetts Drivers to support proposed state ballot measures that would keep app-based drivers as contractors, but a Setting a profit floor of 120% of the state minimum wage, or $18 an hour in 2023, excluding tips. Drivers would also receive health stipends, workers' compensation insurance and paid sick days under the proposals.

The Massachusetts Supreme Court has blocked a ballot measure similar to the current industry-backed one from going before voters in 2022. To back it up, Flexibility and Benefits for Massachusetts Drivers is collecting signatures for five different versions of the current ballot question, only one of which would go before voters on Nov. 5.

“Our ballot question will ensure all of these things for drivers while allowing them to maintain the minute-to-minute flexibility they value,” Conor Yunits, a spokesman for the voting committee, said at Tuesday’s event.

(Reporting by Nate Raymond in Boston, Editing by Alexia Garamfalvi and Will Dunham)

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