Proper Classification of Valet Service Workers – San Francisco, CA

Parking Valet Services Raise Questions About Proper Classification of Workers in Growing On-Demand Economy

In many cities around the country where parking is at a premium, on-demand parking valet services  have recently sprung up to address this ever-growing need. In San Francisco, for example, Luxe “valets” wear blue jackets and use matching blue Razor scooters to pick up your car, wash and fuel it if requested, and park it for a maximum of $15/day, using Luxe-leased garages around town. Competing Caarbon (soon-to-be Carbon) “valets” wear bright pink blazers and black umbrellas, while Zirx “agents” wear bright yellow. Luxe recently became the first of these companies to convert its independent contractor workforce to employees, following in the footsteps of other on-demand startups that have converted their independent contractor workforce to W2 employees.

Although not typically cited in these companies’ decisions to switch to a W2 employee workforce from a 1099 workforce, it is notable that many California startups have faced significant legal liability for potentially misclassifying their workers as independent contractors. For example, Homejoy, a startup that provided on-demand home cleaning services, recently shut down, citing worker misclassification lawsuits as a significant contributing factor.

Independent Contractors or Misclassified Employee?

Although true independent contractors are not entitled to overtime pay or other protections of federal or California employment laws, misclassified employees are are entitled to a host of protections under California law, including (1) overtime pay after eight hours of work in a day or forty hours of work in a week and (2) expense reimbursement for all business expenses. For example, in the case of on-demand parking valets, if courts ultimately determine that these “valets” or “agents” are misclassified as independent contractors to the extent they are designated as such, they may be able to recover unpaid overtime wages and unpaid business expenses such as phone usage and their valet jackets.

To determine if these valet/agents are, in fact, independent contractors, California courts will look primarily at their employers’ right to control the terms and conditions of their employment. Ayala v. Antelope Valley Newspapers, Inc. (2014) 59 Cal. 4th 522, 533-34. Courts will also look at the following secondary factors, although these factors “cannot be applied mechanically as separate tests; they are intertwined and their weight depends often on particular combinations:”

• The right to fire without cause;
• Whether the one performing services is engaged in a distinct occupation or business;
• The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision;
• The skill required in the particular occupation;
• Whether the principal or the worker supplies the instrumentalities, tools, and the place of work for the person doing the work;
• The length of time for which the services are to be performed;
• The method of payment, whether by the time or by the job;
• Whether or not the work is a part of the regular business of the principal; and
• Whether or not the parties believe they are creating the relationship of employer-employee.

Arzate v. Bridge Terminal Transp., Inc., 192 Cal. App. 4th 419, 426 (2011); Garcia v. Seacon Logix, Inc., 190 Cal. Rptr. 3d 400, 408 (Ct. App. 2015).

Have You Been Misclassified as an Independent Contractor?

If you work for one of the following on-demand parking valet companies – or any other “on-demand” startup – and believe you have been misclassified as an independent contractor, you should consult with an attorney to determine if you are entitled to compensation for unpaid wages and unreimbursed business expenses:

• Caarbon (Carbon)
• Zirx
• Vatler
• BloomThat
• SpoonRocket
• DoorDash
• Rinse
• Blue Apron
• Plated
• Minibar
• Bento
• Good Eggs
• OrderAhead

Contact one of our attorneys online or via phone at (415) 421-1800.