Florham Park partner Lynne Anderson was quoted in a Best’s Review article titled, “The Gig Is Not Up.” The article discusses on the ongoing debate of whether gig economy workers should be classified as independent contractors or employees.
While many gig workers like the flexibility and independence of being an independent contractors, they do not receive benefits such as health insurance, worker’s compensation and paid leave – which are reserved for employees. Lynne commented that the DOL has been clear about its efforts to limit misclassification of workers as independent contractors. Lynne reviewed that in July 2015, the DOL issued guidance on independent contractors, warning employers that most workers qualify as employees. In January 2016 the DOL also expanded the scope of joint employer liability for companies that use workers supplied by staffing agencies to insure that there will be “deep pockets” to cover any overtime, workers’ compensation or other liabilities that may result from misclassification of independent workers.
It remains to be seen how the Trump Administration will address the worker classification debate. “We’ll continue to watch if the DOL pulls back on its 2015 guidance,” Lynne said. “For example, President Trump signed an executive order on Feb. 24 that requires all agency heads, including the DOL, to create a regulatory reform officer and a regulatory reform task force to recommend regulations that should be repealed, replaced or modified. The 2015…and 2016 guidance could be identified for repeal or reform by the task force." While there have been talks of a third legal worker classification straddling the classification of independent contractor and employee, Lynne noted we are still waiting for substantial discussion about a new definition that works for the gig economy, leaving companies with the challenge of having to operate with regulations and court decisions that have not kept pace with gig economy business model. “I don’t think we’ll see an expansion of the definition of independent contractor in the near future,” Lynne said. Noting that “states are incentivized by the additional tax revenue if workers are defined as employees.”