Could US ruling affect contractor status in the UK?
Whilst there has been a lot of discussion about the way a contractor’s status can be ascertained in this country, the possibility that an answer may come from overseas has not really been a hot topic of discussion. However, this may all be about to change as a labour ruling in a US court has found that a driver working for the app-led transport company Uber is actually employed rather than operating as a contractor.
The California Labour Commission produced a twenty one page report which ultimately ruled that the driver in question, Barbara Ann Berwick, was not a freelancer as per Uber’s insistence, but rather an employee, who would therefore be entitled to be paid ‘business expenses’.
As well as agreeing with the claimant that she was due to be reimbursed a total of more than $4000 (around £2,500), the Commission also found that Ms Berwick should be regulated, controlled, vetted and monitored as an employee of Uber.
Uber themselves were keen to remind commentators that the ruling was non-binding and draw attention to the fact that five similar cases had resulted in different findings, the implications could still be significant. The entire ‘sharing economy’ could be at stake in the wake of this ruling, and experts such as Berin Szoka, the president of IT think-tank TechFreedom, believe that the success of businesses such as Airbnb, Lyft and Uber could all be under threat if the use of independent contractors is threatened.
There are fears that the Commission’s ruling could force companies that rely on the shared-economy to reduce their offerings, hike their prices and limit the flexibility and scope of their offerings. Uber are trying to downplay the ruling, focussing on the fact that it applies to just one driver who was working for their San Francisco service last year.
A statement made by Uber in response to the ruling said that they were keen to protect their model, which appeals to their drivers because of the flexibility and control it can offer them. According to Uber, many of their drivers work for a range of other car sharing companies as well as a variety of other sources. They plan to appeal the ruling, and the UK’s contractors will be keen to hear the results as well.
For contractors who are keen to begin their independent career, our easy to understand guide to IR35 could help you to ascertain your employment status. Our free contractors’ guides are ideal for anyone who wants to get an overview of what they can expect when working for themselves.
If you want advice from one of our specialist accountants to help you with any aspect of working for yourself, then call us today on 01442 275789 or email firstname.lastname@example.org to learn about our low-cost packages.