The “ABC” Test and Wage Theft: Uber and Lyft May be Underpaying Drivers

Some states, like California and Massachusetts have adopted the “ABC” test for determining whether a worker is an independent contractor or employee. In states using the “ABC” test, litigation with companies like Uber, Lyft, DoorDash, and Instacart about the “independent contractor” status of drivers and delivery persons is frequent. In Massachusetts, the Attorney General filed a lawsuit against Uber and Lyft seeking a declaration that drivers who use their platforms are employees (it is set for trial in 2024) Drivers in Massachusetts may be able to use the ABC test to recover damages for Uber wage theft.

The Massachusetts Independent Contractor Statute

Massachusetts’ independent contractor statute is found at Section 148B of chapter 149 of the Massachusetts General Laws and creates a presumption that an individual “performing any service” is an employee under Massachusetts law, unless the employer can prove:

1. the individual is free from control and direction in connection with the performance of the service, both under his or her contract for the performance of such service and in fact;
2. the service is performed outside the usual course of the entities’ business; and
3. the individual is customarily engaged in an independently-established trade, occupation, profession, or business of the same nature as that involved in the service performed.

Violations of the Massachusetts Independent Contractor Statute can be costly. A willful violation is punishable by a fine of up to $25,000 and/or imprisonment of up to a year for a first offense. Subsequent violations can result in a fine of up to $50,000 and/or imprisonment of up to two years. Even a violation without willful intent is punishable by a fine of up to $10,000 and/or imprisonment of up to six months, with subsequent violations potentially resulting in a fine of up to $25,000 and/or imprisonment of up to a year. 

Alternatively, the Attorney General can issue a written warning or civil citation. Each violation can result in a civil penalty of up to $25,000. First time offenders face a maximum civil penalty of $15,000 for willful violations, and of $7,500 for violations without specific intent. 

In addition, should the employer fail to comply with Massachusetts minimum wage and/or overtime obligation they could be liable for triple damages for (going back three years), prejudgment interest, and attorneys’ fees and costs. Plaintiffs frequently bring such claims on a class action basis, and the amounts at stake can be very large.

Are you classified as an “independent contractor” in a state like Massachusetts or California which uses the “ABC” test? If so, you may be misclassified, and entitled to damages. Call or text Flynn Law Firm today. 888-353-5995.