Once upon a time, it was easy for companies to know who their employees were. Not so much anymore.
With the rise of the gig economy and other creative workforce arrangements, the lines between employee and non-employee have blurred.
Companies often prefer the flexibility of retaining non-employee workers. These relationships come in many varieties — independent contractors, consultants, staffing agency workers, outsourced vendors, etc. Many workers prefer these flexible relationships too. But a growing chorus of government agencies and class action plaintiffs have begun to cry foul.
Objectors claim that these workers are denied the basic protections that the laws provide to employees — overtime and minimum wage protections, anti-discrimination laws, unemployment and workers’ compensation coverage, collective bargaining rights, and the right to participate in employer health and welfare benefit plans.
Independent contractors may claim they are misclassified and should really be deemed employees. Staffing agency or vendor workers may claim they are joint employees of the company benefitting from their services.
Misclassification of these workers can have significant consequences: All of the employment laws that do not apply to non-employees suddenly apply if those workers are deemed to be your employees. And these laws apply retroactively. And they apply to all similarly situated workers.
Noncompliance can have a staggering financial impact. For some companies, it may threaten their entire business model.
This issue is not going away any time soon. Too many dollars are at issue, and the stakes are too high.
This blog will explore the emerging issues in independent contractor misclassification and joint employment.
I hope you will find it helpful, educational, thought-provoking, and hopefully at times entertaining.
Before we get started, a cautionary note: My perspective is unapologetically pro-management. I am a big firm employment lawyer, and my clients are businesses, not individuals. To business owners and executives, in-house counsel, and human resources personnel, come join me. To independent contractors thinking of bringing a misclassification claim, there are many wonderful plaintiffs’ lawyers out there who would love to hear from you, but I can’t help you — unless you just want to talk baseball. Go Tribe!