Category Archives: Gig Economy

01.18.18
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Should Businesses Reclassify Workers as Contractors for 2018? (Or, Why You Shouldn’t Paint Your Dog)

Independent contractortax plan - don’t paint your dog

The Republicans just threw a bone to independent contractors with their new tax law. What does that mean for businesses? Let’s examine.

Strategy question for businesses: Now that tax law provides more favorable tax treatment to independent contractors (see more here), should business reclassify workers as contractors for 2018?

If that’s your reason, then no.

Suppose a new law required ice cream shops to give free cones to dalmation owners. This would be a stupid law, but stay with me.

If I paint dots on a yellow lab, do I get free ice cream?

No, of course not. Even I call my yellow lab a dalmation, it’s still a lab.

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01.15.18
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How Does the New Tax Plan Affect Independent Contractors?

In 1985, Simple Minds released the song, Dont You (Forget About Me). Despite the most ridiculous looking dancing you can imagine (under a chandelier, in front of TV screens, adding to the mood ???), the video was nominated for two MTV Video Music Awards.

The preposterous dance moves are pretty simple, though, which seems fitting for a band named Simple Minds.

Simplicity is the overriding theme here. Despite the overall complexity of the newly enacted tax plan, one thing is simple: The tax plan is good news for independent contractors.

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01.04.18
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Join Me: 2018 Master Class Dates & Locations. Free Attendance.

ShowImage.ashxPlease join me and my BakerHostetler colleagues for the 2018 Master Class on Labor Relations and Employment: A Time for Change. I will be presenting on Labor Law Issues in the Gig Economy. Choose 6 of 12 courses in a full-day session. There is no charge for attendance.

Event dates and locations are:
Jan. 30 – New York
Feb. 27 – Los Angeles
Mar. 28 – Cincinnati

Register here. List my name under referring attorney so that I know to look for you.

Sessions include: Continue reading →

01.02.18
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School’s Back in Session: How Much Training Can You Give to Independent Contractors?

“We don’t need no education / We don’t need no thought control,” are the opening lines to Pink Floyd’s Another Brick in the Wall (Part II). “Teachers, leave them kids alone!”

The same advice can be given when retaining independent contractors. Contractors are supposed to be in business for themselves. They are expected to be competent in performing the types of activities they are being retained to perform. In several of the Independent Contractor vs. Employee tests applied to federal and state laws, the amount and type of training is a factor that can tilt the scales toward a finding of misclassification.

But sometimes, some training is needed. The key questions to ask yourself are, What type? And How much?

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12.21.17
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N. Carolina Strengthens Independent Contractor Enforcement Plan

North carolina independent contractor misclassification

With apologies to James Taylor, In my mind I’m gone to Carolina. That’s not because of Tarheels or Panthers or Hurricanes. It’s because North Carolina just enacted a law to make it easier for the state to identify instances of independent contractor misclassification.

Not only does the law help the state identify business that may be misclassifying workers, it also coordinates the state’s enforcement efforts. The law creates a process for state agencies to share suspected incidents of misclassification, so those businesses unlucky enough to take a hit on an unemployment claim can expect to hear from the Department of Labor and Department of Revenue as well. How sweet it is to be loved by you (and you, and you, and you).

The Employee Fair Classification Act creates an Employment Classification Section within the Department of Industrial Relations. Its role is to receive complaints from workers who suspect they have been misclassified, investigate them, and make it easier for the other state agencies to investigate them as well. Most of the law’s provisions go into effect December 31, 2017. Continue reading →

12.18.17
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EU Court Expands Penalties for Independent Contractor Misclassification

UK england independent contractor misclassification

Crikey! Across the pond, worker misclassification is a hot topic, and the European Court of Justice (ECJ) has turned up the heat on companies using independent contractors.

In a closely watched case, the ECJ ruled that a commission-only sales contractor who was  misclassified was entitled to receive payment for four weeks of annual holiday pay for the entirety of his engagement, 13 years, covering 1999 to 2012.  The case is King v Sash Window Workshop Ltd., decided 29/11/2017 (US translation: 11/29/2017).

In the US, back pay in misclassification cases is often limited to two or three years. Statutes of limitation generally limit how far back a worker can go when seeking a recovery. But what about Europe?

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12.14.17
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Ding-Dong, the Witch is Dead! NLRB Overrules Browning-Ferris

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Remember the good old days, way back in 2014? You recall the time — back when David Letterman was still on the air and it was not yet illegal in New York to take a selfie with a tiger.

Yes, that was life before 2015, when the NLRB waved its magic wand, rewrote the definition of joint employment, and forced several of the planets to spin out of orbit. The Board’s decision in Browning-Ferris erased decades of precedent and caused bloggers everywhere to vomit profuse amounts of text and doomsday predictions.

For those of you who missed the news in 2015 (understandable if you spent the year focused on following the saga of Winston, the Aussie python who swallowed salad tongs), allow me to offer this quick refresher: The 2015 Browning-Ferris decision declared that, under federal labor law, a business would be considered a joint employer if it retained the right to exercise even a teeny tiny bit of control, and even if it never actually exercised that control.

Good news, citizens of earth! The planets realigned on Thursday, when the Board reversed its 2015 decision and reverted back to the old standard. The new standard is the old standard. (Got it?)

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12.04.17
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Can You Pay a Bonus to Your Independent Contractors?

“I want my money!” — Pearl, in The Landlord.

If you haven’t seen this Will Ferrell short video from 1997, take a look. Pretty funny.

Everyone wants their money. Method of payment is one of many factors used to evaluate whether an independent contractor is properly classified or instead is an employee.

Payment by the hour is permitted, but this method of payment more closely resembles employment. Payment by the project, regardless of time spent working, is most appropriate for an independent contractor relationship.

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11.27.17
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Are Santa’s Elves Employees or Independent Contractors?

elves independent contractors or employeesFor roughly 200 years, Santa has been retaining seasonal help at his Arctic Circle workshop. His undersized non-union workers toil in an icy land that sits beyond the jurisdiction of U.S. employment laws, a wise move by Mr. Claus and his attorneys.

While children around the world ask silly questions like, Can I visit the elves? and What do elves eat? and How do they work so fast?, this blog asks the serious question that all adult businesspeople want to know: Are elves employees or independent contractors?

Spoiler alert for the children: The answers are No, Caribou, and Amphetamines.

The adult question takes some analysis. Let’s peek behind the wintry curtain.

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11.13.17
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Here’s a Tip a Cartoon Cat Would Love: Try This Edit to Your Independent Contractor Agreements

Independent contractor misclassification cat“Whenever he gets in a fix, he reaches into his bag of tricks!” Yes, boys and girls, I am talking about Felix the Cat, whose magical bag of tricks could be transformed to get him out of any treacherous situation. Don’t you wish you had one of those?

Well, I won’t share mine, but I can offer this tip, which may help you avoid a treacherous situation.

This weekend I was reading a California decision on independent contractor misclassification. (I do other, more fun things in my free time too, so don’t make fun. Ok, you should make fun a little.) While analyzing Right to Control factors, the court ruled that the worst fact for the business was that it could terminate the contractor at will. The ability to terminate a relationship at will, the court ruled, was the “ultimate” form of control! Really? I agree it’s a factor among many, but the “ultimate factor”? Come on.

Anyway, this problem is easily avoided with some creativity. Allow me to reach into my bag of tricks.

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