Instacart likely misclassifying workers in California, judge rules


While the majority of California workers for the food-delivery company likely qualify as employees under a new state law, the company continues to classify them as independent contractors, thus avoiding paying them a “lawful wage” and providing benefits that come with full-time employment, according to a San Diego judge’s preliminary injunction. Instacart maintains it is complying with the law, and said it will appeal the ruling. (NBC News)

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Talking point: The injunction is the first win for gig workers of companies challenging the state’s AB5, which took effect on January 1. The rule requires companies to extend employee status to workers whose jobs are central to their usual course of business. Instacart is one of several app-based companies arguing the law doesn’t apply to them. Uber is leading a ballot measure, backed by Lyft and DoorDash, to allow exemptions to the law, which opponents argue erodes flexibility for gig workers. AB5, as well as successful challenges to it, could set a precedent for other markets, like Toronto, where gig workers are pushing for employee status or rights like minimum wage and sick leave. Instacart has faced several lawsuits over pay and working conditions—two ongoing points of conflict that some analysts say the company needs to solve before going public.

Correction: The judge in San Diego issued a preliminary injunction ruling that the company likely misclassified workers, but didn’t assert that it had. This item has been updated.