California judge orders Uber and Lyft to classify drivers as employees

A California judge on Monday ruled that the ride-hailing companies Uber and Lyft have to classify their drivers in the state as employees, not independent contractors.

AB5, a new California labor law that went into effect Jan. 1, makes it harder for companies to misclassify workers who should be considered employees, and thus eligible for minimum wage and overtime. California is the largest market in the U.S. for Uber and Lyft, and in May, the state filed a lawsuit against the companies, accusing them of violating AB5.

Judge Ethan Schulman said there was an "overwhelming likelihood" the companies have been wrongly classifying drivers as contractors instead of employees, and issued a preliminary injunction. He delayed the order by 10 days so Uber and Lyft can have the opportunity to appeal.

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Even though nothing will change immediately, this ruling is "huge," Veena Dubal, an associate law professor at the University of California Hastings, told The Guardian. "This is the closest thing in eight years the judiciary has come to enforcing labor rights in the gig economy."