?Delivery drivers recently filed a class-action lawsuit against Weee!, a large online grocer based in Fremont, Calif., for numerous types of alleged wage and hour violations. The allegations, filed on March 23, include:
- Misclassifying over 100 drivers as independent contractors.
- Making unlawful deductions from drivers’ tips.
- Failing to provide drivers with adequate meal and rest periods.
- Failing to pay for work performed during unpaid meal breaks.
- Violating health and safety regulations.
- Prohibiting employees from discussing their wages and working conditions.
- Firing and disciplining workers for discussing their wages and working conditions.
- Retaliating against workers for protesting about legal infractions.
- Failing to pay workers all wages due upon their separation from employment.
- Failing to provide accurate wage statements and maintain accurate payroll records.
These alleged violations “are routine and systematic and result from centralized policies and practices created by Weee! upper management,” the lawsuit said.
The company is accused of violating health and safety rules by not providing drivers sufficient training in the proper handling of dry ice and by not offering them hand protection. Weee! drivers deliver food kept cold with dry ice, which produces carbon dioxide gas. One driver felt dizzy, had difficulty breathing and almost lost consciousness due to prolonged proximity to dry ice, the lawsuit said. Another driver was allegedly assigned to undesirable routes after he complained about safety concerns and about a delivery route coordinator who appeared to be taking bribes from some drivers in exchange for assigning them favorable routes.
Weee! did not respond to a request for comment.
Handling Tips and Breaks Properly
Under California law, employers cannot take any tips given to employees by customers or deduct any amount from wages due to employees on account of tips they received.
If the company was “offsetting their wages by including tips, I would be extremely concerned about that behavior, and I would advise against it,” said Arthur Gaus, an attorney with Kaufman Dolowich Voluck in San Francisco. “You can’t be forced to share your tips with owners. Your employer can’t include your tips toward minimum wage obligations.”
Furthermore, California workers must receive an uninterrupted 30-minute unpaid meal break when working more than five hours in a day, an additional 30-minute unpaid meal break when working more than 12 hours in a day, and a paid 10-minute rest period for every four hours worked.
In California, “the employer’s burden is satisfied by authorizing and permitting employees to take meal and rest breaks,” which must be within the first five hours of a work shift, Gaus said. The employer doesn’t have to remind workers or enforce the breaks.
NLRA Implications
The National Labor Relations Act (NLRA) guarantees both unionized and nonunionized employees the right to speak publicly about their compensation, working conditions and unlawful workplace conduct without facing punishment.
“Employees are allowed to raise issues around the terms and conditions of employment, full stop, and if they experience retaliation on the basis of raising those issues, it would in my estimation create significant liability risk under California state statute and Section 7 of the NLRA,” Gaus said. “What is definitely a wrong way to deal with it is to take an adverse employment action against employees who raised issues related to the terms and conditions of employment.”
Independent Contractors Have Fewer Rights
The lawsuit against Weee! claimed the company did not provide minimum wage, overtime pay, health benefits and a company car for some drivers who were classified as independent contractors. Meanwhile, other drivers were classified as employees.
“Weee! controls the delivery routes and schedules for all drivers, enforces the same rules for all drivers, and requires all drivers to report to the same set of managers,” the lawsuit said.
There has recently been a significant uptick in litigation surrounding the misclassification of independent contractors, according to Netta Rotstein, an attorney and senior HR consultant at Engage PEO, an outsourcing firm based in Fort Lauderdale, Fla.
“The distinction between an independent contractor and an employee is extremely important because independent contractors are not afforded many of the rights that employees enjoy under the [California] Labor Code,” she said. “For example, an independent contractor is not required to be paid minimum wage and overtime, and they are not entitled to receive mandatory meal and rest breaks, reimbursement of business expenses and compliant itemized wage statements.”
A California appeals court ruled on March 13 that ride-hailing and delivery companies can continue to treat their drivers in the state as independent contractors. The court mostly upheld the state’s Proposition 22, which said ride-hailing businesses could legally classify their drivers as independent contractors rather than employees.
To qualify as independent contractors, drivers in California would still have to satisfy a three-part test, called the ABC test, which stipulates they must:
- Be free from the company’s control and direction in connection with the performance of their work.
- Perform work that is outside the usual course of the company’s business.
- Be customarily engaged in an independently established trade, occupation or business.
