In an advice memo released on May 14th, theNational Labor Relations Board (NLRB) concluded that Uber drivers are independent contractors, not employees. This classification means that under federal labor laws, Uber drivers will be virtually unable to unionize, participate in workplace organizing activities, file labor complaints, or seek protections from the federal government. Additionally, this classification absolves Uber from providing its drivers with healthcare, a guaranteed minimum wage, sick days, and other benefits.
The NLRB’s advice memo finds that because Uber drivers are afforded significant opportunities for economic gain and entrepreneurial independence, they should not be classified as employees. The memo highlights three main features of the Uber system that influenced its decision:
- Uber drivers have unregulated freedom to set their own work schedules, including when to accept rides and when to log off the Uber app.
- Uber drivers have the freedom to choose their own work locations by choosing where to log into the Uber app.
- Uber does not place any restrictions to prevent its drivers from working for competing ride-share companies, which allows drivers the freedom to earn money from multiple different sources.
The memo states that these three factors give Uber drivers enough control over their earnings to be classified as independent contractors. Other factors the NLRB relied on in its decision include Uber’s lack of driver supervision, limited interactions between Uber agents and drivers, Uber’s lack of control over drivers’ vehicles, and Uber’s percentage based fee structure.
Many opponents disagree with the advice memo. As a result, there is now a push to advocate for more state-level legislation to protect Uber drivers and other “gig economy” workers. Some countries such as Canada and Germany have gone so far as to define a third classification of worker called a “dependent contractor” – a freelancer who primarily works for one business – which gives those workers some protections such as termination severance, but not as many as full-time employees.
Although the United States may be far from changing its employee classifications on a federal level, some liberal states are working to increase regulation in workers’ favor. Currently, Illinois uses three factors to determine employment status: (1) whether the worker is free from the employer’s control in relation to work performance; (2) whether the worker performs work that is outside the usual course of the employer’s business; and (3) whether the worker is usually engaged in an independently established business of the same nature as the work performed for the employer. An analysis of these three factors can give employers a good indication whether a worker should be treated as an employee or an independent contractor.
If you have any questions regarding how the NLRB memo could affect your business or whether your workers are considered independent contractors or employees, please contact Marcus & Boxerman at (312) 216-2720 or firm@marcusboxerman.com.
announced the filing of 25 new sexual harassment and gender discrimination cases against McDonald’s restaurants.
y 15, 2019, Representative Ann M. Williams (D) introduced 
In February, Governor JB Pritzker signed a piece of legislation that will set Illinois on track to reach a statewide minimum wage of $15.00 by 2025. To mitigate the effect this change has on small employers, the law allows employers with 50 or fewer employees to claim a tax credit for 25% of the cost of the increase in 2020 and gradually phases out over the next several years.
Chicago City Council have enacted or modified several laws and ordinances that affect employers. Sifting through the specific legal language can be tricky, so we’ve summarized the most important changes that are relevant to employers.
In a prior blog post, we advised employers about a once little-known Illinois law, the Biometric Information Privacy Act (BIPA). The BIPA imposes numerous restrictions on how private entities collect, retain, disclose, and destroy biometric identifiers such as fingerprints, voiceprints, retina or iris scans, and scans of hand or face geometry. Businesses most often collect this information from employees, but advances in technology have caused a recent increase in the collection of consumers’ biometric information.
The Department of Labor (DOL) has proposed changes to the Fair Labor Standards Act’s (FLSA) tip pooling regulations. The proposed changes would roll back the Obama administration’s 2011 regulations that prohibited employers from distributing tips to anyone other than front-of-the-house staff who earned them. Following the 2011 Obama administration regulations, the DOL has maintained that tips earned by front-of-the-house employees–including servers, bartenders, and bussers–are the property of the employees, and that employers may not mandate that they be shared with back-of-the-house employees such as cooks and dishwashers. The current rules also allow for a “tip credit,” whereby employers can pay tipped employees less than the federal minimum wage, as long as tips make up the difference.
The National Labor Relations Board (NLRB) is scrutinizing employee handbooks that violate the National Labor Relations Act (NLRA), the law that protects an employees’ collective bargaining and organizing rights. The NLRB looks for workplace rules that restrict—or could be construed to restrict—employees’ right to engage with each other, to organize (including forming, joining or assisting labor unions) and to take other collective action. The language employers use in their employee handbooks is key, because provisions meant to protect the employer may violate the NLRA. The NLRB recommends employers use detailed wording, sufficient context and clarifying examples to prevent misinterpretation.