Hunton Employment & Labor Perspectives

The issue of whether workers are properly classified as independent contractors rather than employees is a common dispute in the gig economy, particularly in newer, technology-based industries, such as ride-sharing.

That issue just became a much simpler one in Florida: On May 9, 2017, Florida’s governor signed into law a bill that, among other things, establishes that drivers for companies such as Lyft and Uber—called “transportation network companies” or “TNCs” under the law—are independent contractors, not employees, as long as the company satisfies four conditions:

(a) The TNC does not unilaterally prescribe specific hours during which the TNC driver must be logged on to the TNC’s digital network.

(b) The TNC does not prohibit the TNC driver from using digital networks from other TNCs.

(c) The TNC does not restrict the TNC driver from engaging in any other occupation or business.

(d) The TNC and TNC driver agree in writing that the TNC driver is an independent contractor with respect to the TNC.

None of the four requirements is likely to impose any new burdens on the ride-sharing companies.  The good news for transportation network companies is that by meeting a low bar for establishing independent contractor status, they will have clarity and certainty of their worker classifications.  They will also be protected from claims available to employees arising under state law, such as claims for workers’ compensation, unemployment compensation, and employment discrimination under the Florida Civil Rights Act.

The less good news for transportation network companies is that the new law does not preempt the tests for independent contractor status applicable under federal laws, such as the Fair Labor Standards Act.  Thus, ride sharing companies are still vulnerable to challenges of their workers’ classification, even in Florida.