A Swiss insurance agency has ruled that drivers working for ride-hailing company Uber are classified as employees rather than independent contractors.
This designation means that Uber will be required to pay social security contributions for its drivers, Reuters reported.
While the California-based startup is expected to challenge the ruling, Uber continues to clash with regulators that have accused the business of sidestepping national labor protection standards and ignoring collective negotiation with drivers who work on freelance terms.
The agency, Suva, provides obligatory on-the-job accident insurance in Switzerland and also makes a decision on which workers are freelance versus employees.
A Suva spokesman told Reuters that the decision is not a general ruling on Uber’s business model, but instead concerns a particular driver who sought clarification on his status.
“For us it is not about the company but about the person involved,” he explained.
Last October, Uber was dealt a blow in the U.K. when an employment tribunal ruled Uber drivers are workers instead of self-employed contractors.
According to a report, the ruling means workers of the gig economy, at least in the case of Uber, get holiday pay, paid rest breaks and the national minimum wage. Uber, noted the report, plans to appeal the ruling.
“Tens of thousands of people in London drive with Uber precisely because they want to be self-employed and their own boss,” said Jo Bertram, regional general manager of Uber in the U.K., in a statement to TechCrunch. “The overwhelming majority of drivers who use the Uber app want to keep the freedom and flexibility of being able to drive when and where they want. While the decision of this preliminary hearing only affects two people, we will be appealing it.”