Make Misclassification a Violation of the FLSA

Misclassification is a hot button topic. As rideshare drivers, we’re very familiar with misclassification. The TNCs, the platform companies, in the U.S. most notably Lyft and Uber, have called all of us drivers “Independent Contractors” since the very beginning. And they’ve sold many on this idea: we’re our own bosses, we work when we want to, less red tape for all—viva la 1099!

But we really aren’t independent. There is SO LITTLE we control. Yes, we can work when we want, and choose not to accept some rides, but the algorithms behind these apps are basically 21^st century robot bosses: they determine how much we earn, if we earn at all, and really, when we can earn. Those same algorithms can even fire us, and we don’t have the right to an explanation or the opportunity to defend ourselves to the algorithms that fire us.

A few examples of what we’re missing out on being misclassified as independent contractors: Fired by the app robot? No unemployment for you. Injured picking up that suitcase for a passenger? No workers’ comp. Need to raise your fares because gas prices have increased by 50%? Never mind! The algorithms set your pay too. (And they didn’t raise it as gas and maintenance costs went up! In fact, most of us saw pay cuts!)

Important point here: It’s the tech that is responsible for our flexibility. And frankly, that tech is not at all incompatible with labor law or “employment” rights.

By misclassifying us as contractors, the companies are winning. They don’t pay into workers’ comp or unemployment, we pay a huge share of the Social Security tax that employers pay (for us called “self-employment tax”), and we pay for their entire fleet. Not to mention they don’t have to worry about minimum wage or overtime. Yup, someone just yesterday told me they spent 6 hours on the app, and earned $47… and that’s gross, not net after expenses. Companies don’t even have rate cards anymore (such as “$1/mile, 23 cents/minute” guaranteed). They use AI and offer us what they think will be our lowest price point—and nine times out of ten, that will mean we’re earning far less than minimum wage after expenses.

There is absolutely no REAL penalty for their business model being one of misclassification. Nothing.

Uber and Lyft violate their workers’ rights so brazenly because enforcement is difficult—the corporations force their drivers to give up their right to sue in court and go to individual, closed-door arbitration instead—and while some back pay may be returned to the driver, the penalties to the companies for misclassification are minor.

As platform workers, we are not alone in our misclassification. Many traditionally deployed workers continue to be misclassified and harmed by it and are in a similar situation as we are—paid less than minimum wage, no overtime pay, and no real way to push their companies to provide full safety net benefits and protections.

Nationally, the Fair Labor Standards Act (FLSA) protects workers with minimum wage and overtime requirements. Do those standards help us push our employers to do the right thing? Well, in order to prove a violation of the FLSA, a worker who is classified as an independent contractor would need to show, first, that they are misclassified and, second, that they were paid below the federal minimum wage ($7.25 per hour) or that they were not paid time and a half for all hours worked over 40 in a week.  This might win them some back wages under the Act.

But misclassification, by itself, is not a violation of the FLSA.

The FLSA was designed to combat conditions “detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers,” 29 U.S.C. § 202(a). If you talk to any driver for a few minutes, you will find that we are fast sinking below a level that allows us health and well-being. And with us are millions of other misclassified workers—and we need real penalties for companies that continue this destructive practice.

It is time that Congress make misclassification a standalone violation of the FLSA with significant penalties—equal to at least three times the backpay owed to the worker—so that large corporations like Uber and Lyft no longer view the misclassification schemes central to their operations as a legal risk worth taking.

Nicole Moore is President of Rideshare Drivers United.

Read essays from workers and advocates whose direct experience with the FLSA’s shortcomings offers a starting point for discussion and action to change it: