One of the biggest employment law issues of this generation is the proliferation of the so-called “gig economy.” In the absence of good-paying fulltime jobs with benefits, many workers are forced to string together several part-time jobs, often ones where they are labeled as “independent contractors” rather than employees.
The differences between these two classifications are important. Many companies are eager to classify workers as independent contractors because it allows them to avoid responsibility for certain worker benefits like:
- Paying minimum wage
- Certain payroll taxes (which get passed to workers instead)
- Workers’ compensation insurance
- Health insurance and paid sick leave
- Unemployment insurance
Independent contractors also have fewer workplace protections than regular employees, making it easier for companies to discriminate against and fire workers.
The “tradeoff” meant to benefit independent contractors is that they theoretically have the freedom to set their own hours and choose precisely how they get their work done. This type of employment relationship makes sense in certain contexts, but too many companies have misclassified their employees as contractors simply to save money and avoid regulation.
Rideshare Companies Take Fight To Voters
Uber and Lyft are both based in California, and collectively employ up to a million rideshare drivers. These companies are fiercely opposed to efforts that would force them to reclassify their drivers as employees rather than ICs. In November, Proposition 22 will be on the ballot in California, allowing voters to decide the status of gig economy workers.
The two rideshare companies, along with DoorDash, Instacart and Postmates, put together the ballot measure in anticipation of Assembly Bill 5, which was originally implemented in January of this year. One AB5’s key features is that it prohibits companies from labeling workers as ICs if the work is part of the companies’ normal business and/or if the companies control how workers do their jobs.
You can read more about the ballot measure here in anticipation of voting in November. But however you feel about the way in which these particular companies operate, it is clear that too many companies are unfairly denying their workers pay and benefits by misclassifying them as independent contractors. If you are currently working as an IC and believe that you have been illegally misclassified, please discuss your concerns with an experienced employment law attorney.