Remember back in June when California classified Uber drivers as employees and not independent contractors?
Amazon is about to go down that same path. The WSJ is reporting that four Amazon Prime Now drivers in Califfornia have filed a class action suit:
The suit, filed Tuesday in Los Angeles County, Calif., Superior Court on behalf of four couriers, seeks back wages and compensation for expenses like fuel and workers’ compensation insurance. The workers are contracted through Scoobeez, a unit of closely held ABT Holdings Inc.
The action potentially thrusts Amazon into the center of a debate roiling Silicon Valley over whether on-demand workers should be treated as employees or independent contractors. Companies such as Uber Technologies Inc. and Postmates Inc. have faced similar suits over their workforce.
While this story is relatively new to the tech world and the servant-as-a-service economy, the problem of defining a contractor versus employee is old news in the realm of labor law. Employers have in the past tried to lower their costs by pretending their employees are contractors.
I'm not saying Amazon is trying to cheat their employees/contractors, but past cheaters have established case law precedence that could work against Amazon.
I'm oversimplifying this a bit, but if a company micromanages a contractor like they would an employee, they run the risk of a labor board telling them that contractor is an employee. And that's not good news for Amazon or the other tech companies trying to keep their costs down:
In the suit, the couriers allege Amazon pays less than minimum wage and treats them like employees, including requiring they wear uniforms and work at set times.
“Not infrequently, they are scheduled to work six or seven consecutive days in a week,” the suit alleges.
And to make matters worse for Amazon, the drivers are represented by Beth A. Ross of Leonard Carder LLP. Ross won a similar lawsuit against FedEx earlier this year on behalf of drivers who alleged they had been mis-classified as contractors. That cost Fedex $227 million, and while it's far more than Amazon will end up having to pay it will still give the Seattle retailer pause.
image by SounderBruce