Perry will draw a name at the end of the broadcast and then we’ll pick a winner and reward someone five hundred dollars, cash. With that said, I want to get to the questions right away. Tess is asking Ron, what is the ABC test and is it in effect now? I know you have explained it before, but for those who weren’t paying attention or some new listeners, please tell us.
Ron: Sure. So the ABC test is the test that all employers or companies have to meet in order to properly classify workers as independent contractors. So A has to do with control. How much control does the company have over the worker, B has to do with whether or not what the worker is doing is part of the company’s usual business and operations and C has to do with whether the worker typically does his thing on an independent basis. The ABC test comes from a case that brought it from other parts of the country actually. What’s in effect starting this year is a statute. I believe it’s 27, 50.3 under the labor code where the ABC test is put in the books and there are a bunch of exemptions of which a lot of the gig economy is not a part of. And that is what’s in effect right now. So the ABC test has existed before, but what has kicked in is that it has been put in the labor code.
Allen: Okay. Thank you Ron. Mark is asking really good question because as recent as a couple of days ago, I think it was dated December 31st Uber came out with a new term of the agreement in which it’s notifying its drivers that changing coverages while the drivers are logged into the app. We know previously that Uber had three phases of coverages. Phase one, phase two, and phase three. Phase one applies when your APP is on but you haven’t locked in a ride yet. Phase two applies when you have locked in a ride and you’re in route to get the passenger and phase three is when the passenger gets into your vehicle. With Ubers new terms of the insurance policies, I don’t see any changes between phase one and phase three, but there is a change, dramatic change in phase two.
When you have locked in a ride and you’re on your way to go get a passenger, the change that we see in Uber’s coverage is that Uber has reduced, is uninsured motorist coverage from 1 million to just $50,000 for period two. Marcus is asking, I think Marcus is misinformed he is saying I think it’s saying that their insurance now covers whenever you’re logged into the app and no longer only went in route to pick up a driving a passenger. That’s not true. Their insurance always covered when your app was on is just, there are different coverages that apply.
So these new terms do not change period one and three, it only changes period two dramatically by reducing the initial motorist coverage from $1 million to just $50,000. So this brings up a related point that Alvaro was mentioning that that’s why it’s very important that if you can afford it, you should purchase additional coverage through your own personal insurance. It’s called a rider coverage that applies, that allows you to have coverage for using your vehicle for business purposes, like driving for Uber or Lyft. Any, any comments on this new terms?
Alvaro: I mean they went from $1 million to 50,000. That should tell drivers that these companies don’t want the best thing for us. I mean and another thing I was going to ask you is that a lot of freelancers the dancers, like those graphic design people, they’re all really mad because of AB five. My question is, can they create like a DBA, like an LLC, like an S Corporation and they can still be independent contractors and do what they’re doing or AB five forced them to become employees or how they can figure that out. Because I feel like these people, like for example, they want this guy, he’s like I used to make $100 an hour right now with the AB five, I’m not going to be an employee and they’re going to pay me only $15.
I feel like I see a problem with the rideshare industry. I see the problem and this is why I supported AB five. But if AB five is going to try to solve a problem where there is no problem, I don’t agree with, know what I mean? So, how can they, I mean, I don’t know if you know the answer [Inaudible 06:18]. How will they can fix that and how they can go wrong? I know a lot of people got exemptions like doctors, lawyers. Can they still get an exemption or it’s too late now?
Ron: So to get an exemption you’d have to go through the legislative process. So it would take a long time. It’s not impossible to amend the law to include more exemptions. As far as people that have been, because I’ve read the news stories that there were a lot of separations of employment and contractors leading up to the end of the year. In order to, the best way to be an independent contractor is to make sure that the company you work for treats you in a way that is truly independent. So yes, if you become a sole proprietor, you get an employer identification number. You register as an S Corp or you could get to a fictitious business name, right? You know, Alvaro doing business as you know, great driver.com, whatever these are things that would help the company have less fear about violating AB five.
Of course, there’s a point where if you’re working full time for one place and you’re 10 99, you’re just violating the law. You know, you’re supposed to be paid payroll taxes. You’re just violating the law. You’re supposed to be worker’s comp, insurance, all that stuff. But if you’re doing temporary work, like you know, three weeks here, two months there does actual contract, this is temporary. You can work for anyone else that you’re here with. Then that’s okay because then that means you’re independent.
I’m going to be here for a little bit, I’m going to be there for a little bit. I’m going to have two jobs at the same time. So it just depends on the amount of control that the company wants to exert over the worker. You know, if they’re like, listen, we’re going to contract you, but you could only work for us and we tell you how to do your job and we tell you when to do this and you know, and if you don’t do it that way, you get none of the payments.
Well then you’re really an employee and you’re being script. See, this is about not getting screwed as a worker. This is about, hey, if you’re going to make so much money off of me, you’re not giving me $100 an hour because you’re being nice. You give me $100 an hour because you would have to be paying more to someone else.
Alvaro: And that’s how I see it.
Ron: That’s really what’s happening. And on top of that, you have to pay payroll taxes. You have to apply to my EDD account so that if I lose my job, if you don’t want to contract me anymore, I have unemployment insurance or if I’m too sick to work, I have disability insurance. 10 99 folks don’t have that. You know, God forbid, if you don’t have insurance and you get sick, you can’t apply to EDD disability, you’re done. Right. And every single independent contractor is like that. What AB five is there to do, it’s there to help society as a whole for people like that. There are companies that take advantage of the system to treat people like really treat them like employees, but do nothing that is required of them that we as a society have said, listen, you need to give back a little bit just in case these employees gets screwed.
Alvaro: Because this is the part I don’t understand. So I was talking to this lady. I mean I saw her post in a different group. She’s like, I’m moving to I think Illinois with my company because I had 30 independent contractors and they were making bang and now because of AB five, I cannot hire them as independent contractor. I will have to hire them as an employee and this is going to ruin my company. So I’m moving my company out of California. I mean, if she’s paying them good money can she adjust the cost of expenses, her company has to make everybody happy? I just don’t understand why people see everything so negative and they’d rather leave than trying to fix a problem. You know what I mean? So I don’t understand.
Ron: There’s a lot of short term thinking. A lot of people that make money as incorrectly as independent contractors think that if they’re new to it, they don’t think they have to pay taxes on a 10 99 and they get a $20,000 tax bill next year. They get sick and they don’t have any insurance and all of a sudden when they should’ve had some type of workers’ comp insurance or disability insurance that’s not there. So the reason companies don’t adjust this one, they don’t want to dip into their profits. Right. Just like Uber is. And two, they don’t see the societal benefit in changing and the individual benefit for changing, right.
You look at your paycheck or I look at my paycheck, there’s some deductions there, right? And that’s like, wow, if I didn’t have those deductions, I would have put more in to pay off my own debts or whatever. But I know that what is being taken off is for my benefit. If I get sick or if I get unemployed or if my wife needs money or you know what I mean? So the business people can’t see right away. So there’s this thing well, if I don’t see it right away, I don’t need it. And if I don’t need it, then you’re taking it from me. And if you’re taking it from me, you’re stealing from me and you shouldn’t be stealing from me.
Alvaro: Because I was reading Lorena Gonzalez, she wrote something that says that a lot of trunk drivers, you know, trucking companies, you know, those big truck drivers, they’re all against AB five not all of them, you know, like half of them are against AB five and when Lorena was writing they said the state actually had to pay so much money into the, you know, the unemployment, into medical. So what you’re saying is that if you don’t have a medical insurance and you don’t have no money there, the state has to pay that money because your employer is getting all their profits and saving them the money, you know, that it’s supposed to pay you for your medical and your other things that you rely on the state. And this is why AB five become a law because there was a problem that the state was looking at that this independent contractor, you know, like, I don’t know if we wanted to go with the, we could start on the AB five.
Allen: Well it is the most relevant issue facing the Uber, Lyft drivers. So I don’t mind spending a lot of time on it. Well, let’s move on to the next question, which is not AB five related and I’ll answer it. Rebecca is asking, have you ever won a hit and run case when you don’t need show, you have the name of the driver or their insurance? Yes, this is very common. If you are involved in a hit and run accident, all you have to do is just make a police report.
If the police don’t come, you go to the police station and make the report and have your attorney handle it. If you have uninsured motorist coverage, that will come into play and it will trigger your initial uninsured motorist coverage. Sometimes then you discover that during investigation we find out the identity of the at fault party, third party. When that happens, we open a claim against them and we resolve the claim through their policy insurance. But yes, it is very common for us to resolve a [inaudible 13:10] settlements in hit and run cases, especially when our clients have the uninsured motorist coverage, which is always the most important coverage you should have and you should buy as high of a coverage as you can afford.
Ron: Okay. Can I ask a nerd legal question?
Ron: Because hit and runs are a crime, right?
Ron: Is there issues with insurance coverage because the driver was committing a crime or had committed a crime?
Allen: No, it’s not. Because your uninsured motorist coverage is strictly, there is no exclusion for other people’s illegal activities because it triggers only if they don’t have insurance.
Ron: That’s it.
Allen: That’s it. The other person’s insurance may deny coverage because they were involved in a criminal activity. They say, no, we’re not going to cover someone going crazy and trying to kill people with their car. But your uninsured motorist coverage is strictly based on does the other person has coverage or not.
Ron: Okay. Thank you.
Allen: Sure, sure. Great question. Actually. Surgery’s asking when getting in an accident, if the driver ask for your insurance, should you not give it to them. Since you guys mentioned do not call your insurance and let them know, or is it inevitable? Good question. Not calling your insurance or putting a claim, it’s different than actually being required to exchange information if you were involved in an accident. The California law requires you to exchange your driver’s license information, your insurance information, and your registration with the other driver before leaving the scene of an accident.
If you don’t, then you’re running the risk of being charged with a hit and run crime. That you basically fled the scene of the accident without providing contact information, insurance information. So yes, it’s serious. So I would always recommend to exchange information. It should be mutual exchange and then contacting an attorney so the attorney can make the claims on your behalf so that you don’t do anything to jeopardize your claim. That’s a great question actually. Easily, it’d be five questions for you. Ron. Apprehend was asking AB five is now in effect, is it too late to join a group or union to stand up for what we deserve as employees?
Ron: So it depends. So you can only join a union if the company has recognized the workers as employees. So Uber and Lyft have not done that yet. So there is no union to join. But you can join a lawsuit or class action. Our firm has filed a class action against Uber under this new law that took effect. So the website to see if you qualified and eligible is enforced AB five.com. So go there and fill out a questionnaire. We’ll be happy to review it and give you a call or email back.
But right now if the company you’re working at does not recognize you as an employee or your class of workers as employees, you cannot form a union. So the only other thing you should do if you believe your rights are being violated under AB five is to call an attorney. And see if you can maybe have your own claim as an individual who was misclassified or you could start your own claim either under a class action or a representative basis under California Law.
Allen: We have a website; it’s called enforce AB five.com. If you go on there, there’s a questionnaire, you can submit answers to the questionnaires. We’ll get that information and someone will contact you from our firm to see if you qualify to become part of the class action lawsuit that we have filed against Uber. Carlos is asking I’m a part time driver that does this to cover the rest of my bills, would the AB five passing does that hurt or help me more? What do you think Alvaro?
Alvaro: Well it’s going to help him more.
Allen: For a part time driver, right?
Alvaro: Yes, because I mean he is not in the worst. Still don’t know how Lyft, it’s so funny how all these companies for example, you know the [inaudible 17:26] scooters, they just terminate older independent contractors agreement. You know that because they used to, you know the scooters?
Alvaro: They used to get paid to charge each scooter like $5. So that company canceled all their agreements on pretty much they fire everybody and they only going to hire a few full timers to charge their scooter. So every company are moving or adjusting their business. Lyft and Uber they don’t give a …., you know, I mean I’ve seen like so many companies going nuts trying to figure something now in fixed up, you know to comply with the law. Lyft and Uber they pretty much like they don’t care, you know, like we don’t care. I just don’t understand.
Allen: That brings us to the last AB five question. Xavier is asking so are we now employees? That’s the million dollar question, right? Uber and Lyft are saying, no, you’re not an employee because under AB five we are correctly classifying you as an appellant contractor and all the lawsuits that have been filed or will be filed is going to test that legal argument.
Ron: So basically, yes.
Alvaro: That’s what I was going to ask you. Because Lyft and Uber, they’re suing the state now in the federal court room, they’re suing them because they say in the AB five is unconstitutional. So I don’t understand because the judge actually, remembered when the DynaMed past like 2018 I think it was, 2018. So the judge said something is wrong with this. So now Lyft and Uber are suing the state because of AB five. I just don’t understand how they can do that and if it’s obviously that they’re breaking the law.
Ron: So I have not heard about that. But a good legal argument would be there’s a part of the US constitution and I believe the California constitution basically says, you can’t take someone’s property, you the government can’t take my property or do something that would cost me a loss of my property without at least due process. And also you compensating me for it. So I imagine that they’re making the argument, and again, I’m speculating, but I would make the argument that hey, this law is actually taking my property indirectly. And that you, the government should stop doing that. That’s a violation of the constitution. So that’s where I believe that’s coming from. So let me read this right under the Uber money…. it’s unconstitutional. See? Look at that and my guess was right.
Alvaro: Yes. While they’re saying that if DynaMed, the judge said DynaMed was great because they saw that there was a problem with independent contractor, they were misclassified independent contractors so…
Ron: It’s a novel legal argument in order to do whatever they can to avoid what everyone, I believe in, they themselves believe is it going to happen, which is they can’t meet the ABC test if they’re really put to the test, not to use the pun, but now that it’s happening, they have to and now that the law has finally come into existence because they couldn’t do this prior to the beginning of the year, now that it comes into existence, now they can challenge it. All these things, we could challenge it and we can say it’s a violation. So they are doing everything they can to try to keep the status quo, which is, you know, within the right to do. But I don’t think it’s going to be successful.
Alvaro: What they’re trying to do is just, you know, gave me more time. That’s what they are actually doing?
Ron: No, I believe what they’re trying to do is to reframe the question instead of saying, hey, the law is the ABC test and whether or not we are correctly applying that is whoa, whoa, whoa, whoa. The ABC test to begin with shouldn’t be applied to us because if you do, you are violating our constitutional rights. So they’re just reframing it. They’re just spinning it another way. It’s all they’re doing. That’s clever.
Alvaro: But do you think they have a chance to win though?
Ron: I don’t because it’s hard to really say that you don’t have due process when it’s, the amount of legislative history that required for AB five to go forward. So I don’t think it’s going to be that has that could have a chance, but they gave themselves a chance
Alvaro: Because to be honest, if I’m the judge, I’ll be like, look, every company out there, they’re trying to figure that out how are they going to comply with AB five They’re trying to hire employees or they’re trying to move all their pieces. Uber in suing the state it’s like, okay.
Allen: Because they have the most to lose.
Ron: They have the most to lose. And you know, it’s a good novel argument and they put it out there. Now you know, it’s not a great chance, but it’s a chance, you know, it’s a chance
Allen: I’m going to answer one last question from Tiffany and then we’re going to move to draw for the month of. Oh, let’s answer Carlos question. I drive for two hours every day AB five apply for me too? Yes. AB five does not distinguish between part time or full time drivers. If your misclassification has nothing to do with how many hours you drive or how many hours you work in any place.
Alvaro: So let’s say that we become employees we form our own union. Can [inaudible 22:54] write on the contract who’s going to be considered a part-timer and who’s going to consider a full timer?
Ron: That would be part of the negotiation.
Alvaro: Okay. Then we’re going to feel that.
Allen: So Tiffany is asking, when is it too late to call an attorney? It’s never too late to call an attorney ever, ever. So you should always call an attorney even if you think it’s too late because you don’t really know the law, you don’t know how good of a case you have. However, the later you call an attorney, more likely that you have already hurt your case because you have done things on your own and you’re not experienced or you’re not trained in negotiating or processing a claim to handle things on your own.
So in whatever position you have, in whatever issue you have, even if you have an attorney, if you want to get a second opinion, it’s not too late to call another attorney. If you’re unhappy with your current attorney for any reason, either they unresponsive or they are mishandling your case. Bottom line is there’s no downside in getting free advice.
Ron: To supplement there’s also a deadline to enforce your rights. So if you call pass certain deadlines, depending on who the defendant is, even if you call an attorney after the fact, it would be too late. So the sooner you call, the better. There’s no reason to delay. The worst it’s going to happen is you’re told no they can’t help you. But at least you find out.
Allen: My point is don’t make the determination yourself.
Allen: Or the statute of limitations has passed. It’s two years later now I can’t sue anyone called an attorney, let them make the determination. So at least you have a peace of mind that you sought free expert advice, Perry it’s that time. Let’s see who the lucky $500 winner is.
Perry: Yes, the Disney one was cool. That was great. I loved that. Okay guys, here we go. And our winner is Adam [inaudible 25:09]. Okay. He’s been watching since day one, so congratulations Adam.
Ron: Good job Adam.
Perry: Yes and so we’ll get in contact and then you can come meet all of our attorneys and you can claim your prize
Allen: With that guys we’re going to conclude today’s Facebook live. Again I wish everyone a happy New Year, healthy New Year, prosperous New Year. Hopefully this AB five issue will get resolved when we get more clarity and then it will benefit everyone involved. Please be safe out there. Until then.