Author: Christopher J. Haugen
“With certain new worker protections already in place, and with a clear trend toward increasing those protections, the appeal to classify workers as independent contractors undoubtedly increases.”
When employers hire an individual to do a job, the employer is faced with a decision about how to classify the worker; are they an independent contractor or an employee? When an employer classifies a worker as an independent contractor, the worker is not entitled to receive certain workplace protections such as the minimum wage, overtime compensation, unemployment insurance, and workers’ compensation. This creates an incentive for employers to classify workers as independent contractors when possible.
LITIGATION AND GOVERNMENT ENFORCEMENT ACTIONS ON THE RISE RELATED TO MISCLASSIFICATION OF WORKERS AS INDEPENDENT CONTRACTORS
In recent years, there has been a spike in the amount of private litigation, government enforcement actions, and government oversight related to the misclassification of employees as independent contractors. In 2015, investigations by the wage and hour division of the U.S. Department of Labor (DOL), resulted in more than $74 million in back wages for more than 102,000 workers. There have also been a number of well-publicized lawsuits, including the California class action related to Uber drivers that survived summary judgment.