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Wages and on-demand delivery jobs

by | Oct 24, 2016 | Wage And Hour/Overtime

The rise of services like Uber, Lyft, Postmates and Instacart has created an on-demand lifestyle for consumers. It has also led to new issues regarding wages.

These companies pay employees in different ways. Sometimes employees are paid per delivery or by mile, rather than by hours worked. This can lead to inconsistent payments and confusion amongst employees, and the workers are beginning to fight for their rights.

In Philadelphia, UberBLACK drivers filed suit against the company for failing to pay them the federal minimum wage of $7.25 an hour. A district judge recently denied Uber’s motion to dismiss the claim. This lawsuit follows one in New York by the New York Taxi Workers Alliance over similar minimum wage and overtime issues. In Illinois, a nationwide class action lawsuit alleged that Uber was withholding tips.

In the Philadelphia case, the district judge allowed the lawsuit to move forward because he agreed with the drivers’ argument that they weren’t responsible for tracking their specific wages or hours worked. The judge ruled doing so is the responsibility of Uber as the employer.

Uber argued, and the Court agreed, that the drivers did not sufficiently plead that they actually worked more than 40 hours per week, not that drivers are responsible for keeping track of their OT hours.

As we keep on eye on this lawsuit, we wouldn’t be surprised if more cases like this arise out of the sharing economy and on-demand services. These services show no signs of slowing down, and some of the companies providing these services are using new wage structures that may conflict with established wage and hour laws that are based on more traditional notions of the employer-employee relationship.

In fact, just last week, delivery drivers for Postmates, Instacart and Uber in New York teamed up to launch the New York Messengers Alliance in an attempt to unionize. They are fighting for fair pay and better working conditions for their drivers.

The rights of workers for these types of companies will be an interesting issue to follow in the coming months and years as this industry continues to grow.

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