A ruling from the superior court of the state of California means that, from 20 August 2020, drivers for ridesharing organisations Lyft and Uber must be classed as employees and not independent contractors.

Over 750,000 Uber drivers and over 1.4 million Lyft drivers were found to have been misclassified as independent contractors, which breached the US Assembly Bill No.5 that came into effect on 1 January 2020. The bill ensures that all workers who meet its criteria receive the basic rights and protections guaranteed to employees under Californian law.

Ethan Schulman, superior court judge, said:

“In the specific context involved here, both the legislature and our supreme court have found that the misclassification of workers as independent contractors deprives them of the panoply of basic rights and protections to which employees are entitled under California law.”

Lyft and Uber will now need to pay all drivers the minimum wage, employee compensation, unemployment insurance, sick leave and family leave.

Both organisations are appealing the decision, which raises the possibility that the case will not be concluded before November’s US elections. California voters will be deciding in November on a measure to exempt app-based workers from the requirements of the Assembly Bill No.5.

Uber is also contesting the joint ruling, stating that this should be two separate legal cases.