New Florida Law Grants Independent Contractor Status to App-Based Drivers

IMG_1064In December 1965, the Beatles released Rubber Soul, which led with Drive My Car.  (“Asked a girl what she wanted to be/She said Baby, can’t you see?/I want to be famous, a star on the screen/But you can do something in between.”) You can thank me later for getting that song stuck in your head all day.

Under a new Florida law, online ride hailing service are singing “Baby you can drive my car, and maybe I’ll love you.” If certain easy-to-meet conditions are satisfied, drivers for online ride hailing services are declared independent contractors by law, not employees. This new law protects Uber, Lyft, and similar services from misclassification class actions brought under state law.

The requirements for being granted independent contractor status under the new law are simple. They are also consistent with how these app-based services typically operate.

1. The service cannot tell the driver when to work;
2. The service must allow the driver to work for other ride hailing services;
3. The service must allow the driver to engage in other work or business activities; and
4. The driver and the service must agree to independent contractor status in writing.

Beep beep’m beep beep, yeah!

The law requires ride hailing services operating in Florida to conduct criminal background checks on their drivers. Drivers with certain types of convictions are barred from using their ride hailing app.

Drivers must agree to follow non-discrimination rules. They cannot accept street hails or passengers who solicit rides without using the service’s app.

While this law provides clarity for drivers and ride services under Florida law, it does not provide protection under any federal laws. Drivers being granted independent contractor status under Florida law can still be deemed employees under federal laws.

For example, federal tax law will still apply a Right to Control Test, and federal wage and hour law will still apply an Economic Realities Test. The Florida law will carry no weight when federal courts or agencies analyze these relationships under federal law.

As is often the case when trying to determine Who Is My Employee?, the same relationship can be deemed an independent contractor relationship under some laws but employment under others. It would not be surprising to see these types of federal/state splits emerging in Florida.

The loudest groan you are hearing with the passage of this new law is from taxi cab companies. And rightly so. Taxi drivers are excluded from coverage and remain employees. This dichotomy places cab companies at a competitive disadvantage, since they need to pay FICA, FUTA, provide employee benefits, and observe the other administrative requirements inherent in employment relationships. Taxi cab drivers are not converted to independent contractors under the new law.

Right or wrong, the Florida legislature is picking winners and losers. For those of you keeping score at home, it’s now Lobbyists 1, Free Market 0.

The law takes effect July 1, 2017.