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Another California official sues Uber and Lyft for IC misclassification under AB 5 law

August 06, 2020

The California labor commissioner announced Wednesday that it filed separate lawsuits against Uber Technologies Inc. (NYSE: UBER) and Lyft Inc. (NASAQ: LYFT) alleging systemic wage theft by misclassifying their drivers as independent contractors. Workers are deprived of a number of legal protections as a result of the misclassification, it argued. The suits aim to recover amounts owed to drivers, including nearly 5,000 drivers who have filed claims for owed wages with the office.

These lawsuits follow another suit filed by California Attorney General Xavier Becerra in May that argues the companies’ classification of drivers as independent contractors is improper under California’s AB 5 law.

Wednesday’s lawsuit by the labor commissioner also cites AB 5, saying its aim is to ensure drivers are not misclassified.

“The Uber and Lyft business model rests on the misclassification of drivers as independent contractors,” California Labor Commissioner Lilia García-Brower said in a statement. “This leaves workers without protections such as paid sick leave and reimbursement of drivers’ expenses, as well as overtime and minimum wages.”

The suit was filed in Alameda County Superior Court. It estimates that Uber and Lyft each employ more than 100,000 drivers in the state.

Any amounts collected for unpaid wages, liquidated damages owed to workers, penalties owed to workers and reimbursement of business expenses will be distributed to all drivers who worked for Uber and Lyft.

While Uber and Lyft are facing lawsuits from state officials, they and other human cloud firms are taking aim at the AB 5 law itself. The companies are backing a ballot measure, Proposition 22, that will go before California voters in the Nov. 3 election. If approved by the voters, the measure would allow Uber and Lyft to continue to classify the drivers as independent contractors, among other things.

The campaign backing Proposition 22 last month said it was suing Becerra for what it said was “false and misleading” ballot summary of the measure for voters.