(CNN) — A California appeals court has dealt a blow to rideshare companies who want to keep their drivers as “independent contractors,” not employees.
On Thursday, the court ruled that Uber and Lyft must reclassify their drivers as employees. That means they would be eligible for benefits like minimum wage, overtime, paid sick leave, and unemployment insurance.
Both rideshare companies have threatened to pull out of California if they are required to bring on their driver as regular employees.
In response, Uber and Lyft are trying to get a ballot measure passed in California that would exempt them from the law.
The court’s ruling won’t make the change happen right away. The rideshare companies will have at least 30 days to comply with California law once the appeals process is over.
Uber and Lyft also have the option of appealing the ruling to the California State Supreme Court.
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