by Bernard D. Nomberg, Partner, The Nomberg Law Firm
Uber, the popular ride sharing service, has only become available in Alabama within the past year or so. The company has taken some criticism, however, due to the fact that their drivers are classified as independent contractors as opposed to employees. As an effect, drivers are unable to receive benefits and do not have income taxes withheld each paycheck. Classifying workers as independent contractors versus employees can save a company quite a bit of money, but the harsh reality of the classification becomes apparent when an individual is injured on the job.
If an Uber driver is injured while on the job, he is unable to receive workers’ compensation benefits. In effect, the driver may lose wages and is forced to rely on personal health insurance to pay for medical expenses. Because the driver spends his time driving, the likelihood of him being involved in an auto accident and being injured is far greater than someone who does not drive for work.
Uber has taken some steps to provide for their workers benefits such as offering optional workers’ compensation packages funded by ride surcharges. This is far from the typical benefits employees receive, but is an attempted effort to provide some sort of peace of mind for drivers.
Generally speaking, workers’ compensation is required by law for traditional employees and must be paid by the employer itself. Independent contractors are not traditional employees by any means, however and therefore are not required to receive benefits paid for by the employer.
Some employers misclassify employees as independent contractors to avoid paying taxes and workers’ compensation premiums. Uber specifically has taken on large expense in litigating the ever-evolving issue. It can be important to understand the key differences to know your rights. If you believe you are improperly classified as an independent contractor, the IRS can inquire for you.
If you are properly classified as an independent contractor, take steps to protect yourself in the event you are ever injured on the job. Start a savings account designed specifically as a safeguard. Finding a good insurance policy that will ensure your medical expenses are covered is another key tip. Additionally, assess whether the risks are worth the reward in terms of your employment classification.
Overall, be mindful of the different classifications as it can make a big difference if you become injured on the job. For more information on independent contractors and workers’ compensation, visit: https://www.naic.org/store/free/OWC-OP.pdf
If you have any questions or concerns about this issue or other issues on the law, please call the Nomberg Law Firm at 205-930-6900.
Bernard D. Nomberg has practiced workers’ compensation law in Alabama for more than 20 years. Bernard has earned an AV rating from Martindale-Hubbell’s peer-review rating. He has been selected a Super Lawyer by Super Lawyers Magazine as well as a Top Rated Attorney by B-Metro Magazine. Bernard is the President of the Alabama State Bar’s Workers’ Compensation Section.