WORKERS' COMP IN A "GIG" ECONOMY

These now large and powerful companies continue to lobby for lower standards of worker protection. Their goal is to avoid complying with tax and labor laws by ensuring so-called “gig” workers are seen as independent contractors under workers’ compensation law.

When an employer incorrectly treats employees as independent contractors, it is called “misclassification”. Growing businesses like Uber use misclassification to hire as few employees as possible and claim the workers who carry out the bulk of their business (e.g. driving) as independent contractors. These businesses can then avoid paying for sufficient workers’ compensation insurance, as well as unemployment insurance and social security benefits, and upholding proper minimum wage and overtime laws. This not only hurts workers by depriving them of their rights, but also places an unfair burden on law-abiding businesses that sustain higher costs for their workers’ compensation, unemployment and social security benefits.

There is an ongoing debate as to whether these “gig” workers are employees or independent contractors. The companies contend that the workers make their own schedules and provide their own equipment (e.g. cars), thus making them independent contractors. However, companies like Uber or Handy negotiate the workers’ pay rates (e.g. the cost of a ride), take a percentage of these earnings, and solely handle behind-the-scenes business matters like complaints and advertising.

Misclassification is fraud. While the business may contend that a worker is an independent contractor and provide them a 1099 form instead of a W-2 form, this may not be valid under the law. The New York Workers’ Compensation Board may decide that the workers are in fact employees and thus are entitled to benefits.