For Uber drivers, the question of whether they are properly considered employees is far from just a mere legal technicality.

How that issue gets resolved in some ongoing litigation could ultimately make a difference worth millions of dollars in pay for Uber drivers in California.

Classifying drivers as independent contractors allows Uber to avoid a whole world of labor-related costs.

The company does not have to reimburse drivers for costs related to the operation of their vehicles, such as gas, mileage, tolls, maintenance, repairs or vehicle insurance. All those costs get borne by the drivers.

The company also does not have to pay for certain employee benefits like health care, unemployment insurance and workers compensation insurance.

It also doesn’t have to worry about complying with certain legal protection for employees like minimum wage laws, overtime pay or rest breaks and meal breaks.

Classifying its drivers as contractors instead of employees has been at the core of Uber’s business model. It’s helped the company grow to be worth more than $60 billion, according to some estimates.

But workers can’t be reduced to contractor status just because the company says so. When it comes down to it, a court may have to determine the workers’ status by picking through the details of their relationship with the company – primarily considering how much control the company exerts over what the workers do and how they do it.

In some cases, courts have caught certain companies misclassifying their workers as contractors when they should have been considered employees.

That question of employee-vs.-contractor is at the core of several dozen employee rights lawsuits already filed against Uber.

Lawsuit Continues to Seek More Pay for Uber Drivers in California

One Uber class action lawsuit seeking more pay for Uber drivers in California and Massachusetts appears to be back on track following a federal judge’s rejection of a proposed settlement.

This past August, U.S. District Judge Edward Chen finally pulled the plug on the settlement, which had been on the table since the previous April.

Even though it could have been worth up to $100 million, Judge Chen determined that amount wasn’t enough to make the settlement “fair, adequate, and reasonable” when lawyers for the drivers said Uber might actually owe ten times that amount in pay for Uber drivers in California.

The settlement also would have resolved the issue of Uber drivers’ status, classifying them once and for all as contractors. Judge Chen’s rejection of the settlement presumably puts the employee-contractor question back up in the air.

A resolution in the driver’s favor could mean more pay for Uber drivers in California and possibly some hefty statutory penalties for the company itself.

At the same time, the number of drivers represented in this Uber class action lawsuit could be significantly decreased if Uber wins its current effort to send individual claims to arbitration.

The company seeks to enforce a clause in its service agreement that requires drivers to waive their rights to class action litigation and agree to resolve any disputes with the company through private arbitration.