The verdict is in: Uber drivers qualify as employees in California. In a controversial lawsuit last month, the California Labor Commissioner’s office ruled that Uber drivers must be classified as employees, not independent contractors.
The ruling was the culmination of years of tension between the corporation and its employees who, previously, were expected to pay for work-related expenses such as gasoline and car insurance. Uber says the “contractor” status was designated to reflect their workers’ flexible schedules, while critics argue that the classification allowed the company to withhold benefits and reimbursements.
In contrast, some companies have started offering beyond-competitive benefits—without a court order. Well-known restaurant chains Starbucks and McDolnald’s are acknowledging all workers as employees, regardless of full- or part-time status. Last week, Chipotle followed in their footsteps by extending full employee benefits to part-timers. Starting July 1, 2015, part-time employees at the Mexican fast food chain will be eligible for paid vacation, sick leave, and tuition reimbursement.
J.D. Cummings, recruitment strategy manager at Chipotle explained in a report in Restaurant News:
“It’s an incredible statement by our leadership about how much we want to invest in the best people we have and to keep them with us.”
He added that the benefits would help recruit high school and college students—the company’s target demographic for entry-level positions.
Are Benefits Better than Workplace ‘Flexibility’?
The generous benefits indicate that Chipotle is adapting to appeal more to its core workforce. It understands that Millennials—the largest generation in or entering the workforce—expect more from their employers, and as a result, employers who meet those demands are rewarded with loyalty.
Starbucks for example, which offers similar benefits to part- and full-time workers, has an employee attrition rate that’s about half that of the average retailer. Considering the high cost of replacing workers, and the high turnover part-time-heavy employers typically experience, it makes sense to invest in keeping them satisfied and career-focused.
On the flipside, while Uber drivers are frustrated by the lack of benefits, they continue to relish the opportunity to choose when, where, and how frequently they work. In support of Uber’s business model, a Millennial Branding report found that 45 percent of Millennials will choose workplace flexibility over pay. But whether that hypothetical data holds true in the real world is still up for debate.
Read This Next: “Why Should I Want to Work Here” is the New “Why Should I Hire You?“