A delivery driver checks off that all the orders are ready to ship

In the bustling world of delivery services, a crucial question often arises: are delivery drivers independent contractors or employees? This distinction is not just a matter of terminology; it has significant legal, financial, and operational implications for both drivers and businesses. As the reliance on delivery systems expands across various industries, comprehending these classifications becomes increasingly crucial. This blog will examine the nuances of this issue, shedding light on what it means for those behind the wheel and the businesses they drive for.

Understanding the Basics

At the heart of the delivery driver dilemma is the distinction between being an independent contractor and an employee. Legally, this difference hinges on factors like the degree of control a business has over the worker and the level of independence in their role. Independent contractors typically have more freedom in how they complete their work and often provide their own tools, whereas employees work under closer supervision and are provided with what they need by the business. Financially, the classification affects tax obligations, benefits, and job security. 

Delivery Driver: Independent Contractor or Employee

For delivery drivers, determining whether they are independent contractors or employees hinges on several key factors. One crucial element is the degree of control the company exercises over the driver’s work; if the company dictates specific working hours, routes, and methods, the driver is more likely an employee. Another factor is the level of independence in their role; if drivers use their own vehicles, set their own schedules, and have the freedom to work for multiple companies, they lean towards being independent contractors. Additionally, the permanence of the relationship and the extent to which the work is integral to the business play a significant role in this determination.

The Impact on Delivery Drivers

The impact of misclassification on delivery drivers can be profound. When labeled as independent contractors instead of employees, drivers often miss out on crucial benefits like minimum wage guarantees, overtime pay, health insurance, unemployment insurance, and workers’ compensation. In addition, an independent contractor may miss out on paid leave. This lack of security extends to job stability and income predictability, placing drivers in a precarious financial position. Also, as independent contractors, drivers bear more operational costs, such as vehicle maintenance and fuel, without employer support. Understanding and addressing these disparities is essential. Delivery drivers need to be aware of their rights to ensure they are correctly classified and receive the protections and benefits they deserve.

Recent Case in Point

A recent class-action lawsuit was filed by former delivery driver Joshua Walz against Walmart, alleging that the company wrongly classified its app-based delivery workers as independent contractors rather than employees. Walz claims that these workers were subject to significant control and direction by Walmart, making them eligible for guaranteed wages, breaks, and benefits as required by Washington state law. He argues that drivers were paid piece rates, directed on how to load goods, and faced potential termination if they declined too many deliveries. 

Walz claims that Walmart’s misclassification has resulted in the unlawful denial of minimum and overtime wages, as well as inadequate compensation for time spent waiting for deliveries and driving. Instead of hourly pay, Walmart pays drivers based on the number of deliveries made. Furthermore, the complaint alleges that Walmart retained tips paid by customers and failed to provide drivers with required breaks or paid sick leave as mandated by Washington state law. Walz is seeking unpaid wages plus double that sum in exemplary damages, and estimates suggest potential damages could exceed $5.8 million for Walmart. The case was recently removed to Washington federal court.

Legal Obligations and Employer Accountability

Businesses have a legal obligation to correctly classify their workers. Misclassifying employees as independent contractors can result in significant legal repercussions, including fines, back payment of wages, taxes, and penalties. Employers must adhere to strict legal criteria when determining a worker’s status, considering factors like the degree of control over the worker and the nature of the work relationship. This responsibility is not just a legal formality; it’s a matter of fairness and respect for workers’ rights.

Navigating Legal Complexities

Navigating the legal complexities of worker classification requires a thorough understanding of labor laws and regulations. For delivery drivers uncertain about their status as independent contractors, it’s crucial to examine factors such as the degree of control exerted by the employer, the level of independence in performing tasks, and the permanence of the relationship. As legal advocates focused on employment law, we can guide workers through this process, helping them determine if they have been misclassified as an independent contractor instead of an employee.  

Are You a Delivery Driver with Questions About Your Classification as an Independent Contractor?

The proper classification of delivery drivers is not just a legal issue, but a matter of ensuring fair and just treatment in the workplace. By providing legal support and representation, we aim to ensure that drivers are properly classified and receive all the rights and benefits they are entitled to under the law. If you’re facing uncertainties or challenges regarding your classification as a delivery driver, the Lore Law Firm provides a free review of your situation. Please complete our free and confidential online client intake form to get started.

Michael Lore is the founder of The Lore Law Firm. For over 25 years, his law practice and experience extend from representing individuals in all aspects of labor & employment law, with a concentration in class and collective actions seeking to recover unpaid back overtime wages, to matters involving executive severance negotiations, non-compete provisions and serious personal injury (work and non-work related). He has handled matters both in the state and federal courts nationwide as well as via related administrative agencies. If you have any questions about this article, you can contact Michael by using our chat functionality.