Employees from BMW's DriveNow subsidiary sued the company alleging it violated wage laws in California.
Employees of DriveNow, the electric car-sharing unit wholly owned by BMW, are suing the company for failing to meet the minimum wage and overtime laws in California.
The lawsuit claims the BMW subsidiary, which operates in the San Francisco Bay area, avoids paying minimum wage and overtime by designating workers as independent contractors, according to a Private Attorneys General Act lawsuit filed by employees in San Francisco Superior Court.
Citing company policy, BMW spokesman David Butchko, declined to comment on the lawsuit.
The plaintiff, Marcello Costas, in the case claims that the company incorrectly classified he and his co-workers as independent contractors when they were hired. The employees’ duties included: driving rental cars from place to place, cleaning the vehicles and charging their batteries. The company violated more than a dozen California labor laws, according to the lawsuit.
Not only did DriveNow not pay minimum and overtime wages, according to the complaint, but also it didn’t provide meal and rest breaks. DrivenNow also required him and his co-workers to pay a portion of their wages back to an online outsourcing company, TaskRabbit, for managing their payroll.
The company also set the drivers’ schedules, controlled all aspects of their workdays and treated them as employees, yet paid them as independent contractors to skirt California and San Francisco labor laws.
“DriveNow retained pervasive control over the work performed by (the plaintiff) and his similarly situated co-workers,” the complaint said. “The relationship between DriveNow and its drivers was that of an employer and its employees. No single aspect of the relationships between DriveNow and plaintiff and his similarly situated drivers was characteristic of an independent contractor relationship.”
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BMW’s DriveNow service is available in San Francisco, Seattle, Vienna, London and five cities in Germany. Customers picked up the electric cars in their neighborhoods and later dropped them off at locations near their destination.
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California’s Labor & Workforce Development Agency has designated Patrick Kitchin to serve as a private attorney general in the case.
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“The Private Attorneys General Act is a powerful tool for California workers,” Kitchin said. “By authorizing individuals and their attorneys to enforce California’s labor laws on behalf of the LWDA, the state has been able to collect over $24 million in penalties in more than 1,255 PAGA cases brought by individuals like Mr. Costas.”
BMW and company will definitely lose this case as the IRS has already made it clear that any employer who essentially controls a persons activities has to claim them as an employee not a contractor. As usual all major companies try to beat the system at the expense of their employees and this case just highlights those unscrupulous operating practices.
Let me state that I was employed by BMW at one time and they were a wonderful company to work for. It appears to me that what you are seeing here is a company (BMW) looking to explore and operate in an new field using the most contemporary work methods and practices. DriveNow was providing work to people on a less than full time basis…making it possible for them to earn money without the necessity of a full time commitment. I think a lot of people will end up working that way in the future and some people will think it is great.
Uber has been a disruptive technology to the “medallion” taxi industry in New York City. There are lawsuits there as well. These will be part of our evolving workplace environment. It is not about good guys and bad guys, it is about where we draw the boundaries in a changing world….
BMW is a very forward thinking and ethical company ..this is a new kind of venture…the definition of “who is an employee” is likely to change dramatically for all of us in the world ahead.
I have no personal issue with BMW but they must be aware of U.S. employment laws which are very clear on contractors vs. employees. If the lawsuit claims are accurate there isn’t a chance that BMW will escape conviction. I find it impossible that BMW could not have been aware of U.S. employment laws regarding contractors vs. employees.
As far as “who is an employee” for tax and legal purposes in the U.S. the issue is legally pretty clear and not likely to change any time soon because numerous entities have tried to exploit workers by claiming them as contractors when they were not. That is precisely what this lawsuit is all about. Quite frankly I’m surprised and disappointed in BMW. They’d never try this in Germany because they’d be crucified.