Last week we posted about the DOL’s recent interpretation of workers’ status as employees versus independent contractors. Even if your company does not currently use any form of independent contractors (and thus you’ve been only following these changes in passing), it’s important that you understand the implications of these types of interpretations/court rulings as they affect a wide variety of services we use—from in-home cleaning to travel to the whole “on demand” economy.
While traditionally employers have been able to use independent contractors for a myriad of tasks, recently courts (and administrative agencies) have been limiting those positions that can be properly categorized as such. The expanding definitions of “employee” has assisted in the rise of class actions filed against companies all over the country by individuals alleging they have been improperly categorized—and thus denied benefits such as unemployment, workers compensation, minimum wage, and overtime.
Over the past few months, and still now, Uber has been fighting lawsuits regarding worker classification on multiple fronts. Further, cleaning service Homejoy recently announced that it will be shutting down on July 31—citing four worker classificaiton lawsuits as the “deciding factor.” From a technology standpoint, these lawsuits could have an even greater effect on the “on demand” marketplace than it does on more traditional enterprises.
Verrill Dana will continue to keep readers informed on the evolution of these cases. Should you find yourself in the meantime grappling with a classification issue, Verrill Dana’s Labor & Employment Practice Group remains available “on demand” to help you with the issues.