Risk & Compliance

DoorDash Sued for Flouting Gig-Worker Law

The California lawsuit contends that the delivery company willingly misclassified employees to reduce business costs.

In a complaint filed before a California court, Chesa Boudin, District Attorney for San Francisco, alleged DoorDash was in violation of the state law, which forbids companies from classifying employees as independent contractors.

A California law that requires firms to label gig-workers as employees instead of contractors, and mandates that they pay local, state, and federal taxes accordingly, came into force in January 2020.

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DoorDash is being accused of “unlawful, unfair, or fraudulent business acts” by California’s attorney general for not adhering to the law.

Attorney General Boudin said, “I assure you this is just the first step among many to fight for worker safety and equal enforcement of the law,” as reported by Misson Local, a bilingual news portal.

In an email to Business Insider, a DoorDash spokesperson said, “We will fight to continue providing [DoorDash workers] the flexible earning opportunities they say they want in these challenging times.”

The spokesperson claimed the court case was an effort to “disrupt essential services.”

Last week the Public Utilities Commission of the State of California had classified drivers for Uber and Lyft as employees under the same law.

DoorDash, along with Uber, Lyft, and Instacart teamed up last year to try to campaign against the California law dubbed AB5.

According to Business Insider, in a lawsuit filed in April, Uber and Lyft drivers are claiming back wages of $630 million.

Last year in a ruling called the Dynamex decision, California’s Supreme Court laid down three points to determine whether a worker should be classified as an employee.

The San Francisco lawsuit contends that DoorDash willingly misclassified employees to reduce business costs.

DoorDash filed to go public in late February.

This story originally appeared on Benzinga.

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