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Key Employment Law Pointers Gig Workers Need to Know

By Erik Larson posted 05-02-2021 22:48

  

Covid-19 has sent people scrambling for anything that represents a job. Many have lost their jobs and a gig economy has been created whether you have a full-time job or now. Now American gig-ers need to know what law implications exist. 

Worker classification and the law

Thousands upon thousands of Americans work in the gig industry, but now there is an issue about who qualifies for benefits like unemployment insurance and workers' compensation.  

Gig workers or independent contractors are far cheaper to hire than employees and Lacy Law Firm has their hands full assisting companies on worker classification. They’ve got queries around gig workers and increasing their rights and benefits.

These companies need to know what the law is about gig workers to reduce court cases against them concerning worker classification. American employers have always benefited from freelancers as they cost much less than full-time workers, so what now? 

Uber and Lyft want independent contractors

There’s a lot of debate raging around gig workers and new federal rules with worker classification. For companies such as DoorDash, Uber and Lyft, the new rules will mean them having to reclassify employees as independent contractors

They will have to make up their minds about who will be protected by workplace laws. Businesses are pushing for measures that will provide drivers some benefits without employee status. Uber and Lyft agree that they are prepared to pay millions of dollars to ensure their workers are classified as independent contractors.

Worker classification has huge implications for gig companies, whose business costs will increase if they have to treat drivers as employees. 

Avoiding labor costs with independent contractors

Less overheads come with hiring freelancers, independent contractors or temporary workers. They are all part of the gig economy. Typical examples of people in the gig economy are drivers for Lyft or Uber, freelance writers or workers for a temp agency.

In the gig economy, workers are independent contractors and not employees. When hiring an independent contractor instead of an employee, the employer has always been able to avoid paying federal taxes and worker’s compensation insurance. 

The employer avoids all kinds of frustrating labor laws. Most employers prefer to hire independent contractors over employees. 

Biden wants gig workers to be employees

The Coronavirus Aid Relief and Economic Security Act included provisions to help gig workers with the coronavirus pandemic. Under the Trump administration, workers qualified for unemployment insurance. Gig workers also qualified for the additional $600 per week in unemployment benefits. 

Now Biden has come into power and is campaigning to turn gig workers into employees. Where gig work was once clear-cut, with Biden, it is now becoming a massive labor issue. 

Then again, for those in favor of gig workers being employees, under the Biden administration, the Labor Department could take action that would benefit gig workers, such as going after stronger enforcement and legal options against companies found to be misclassifying workers. 

The gig economy war rages on

Gig work has always come with no safety net, and workers have never been eligible for unemployment benefits, paid sick leave and employer-paid health insurance. These workers have flexibility on their side but they don’t qualify for the same benefits as regular employees. 

It was in 2018 that the California Supreme Court created a test to see if companies should classify workers as employees or independent contractors. The controversial law wasn’t well-received, while supporters of the law say it will strengthen workers’ rights. 

And so the gig worker war rages on. Gig workers value their independence and flexible working lifestyle. For many, it is thought that it is time to update America’s labor laws so that gig workers don’t have to give up on their independence to access the benefits they aren’t currently receiving. 

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