Dashing through the snow

On a one horse open sleigh

O’er the fields we go

Laughing all the way

Oh Jingle Bells... a fun and festive holiday song that always gets me in the wintery spirit. Here in Maine, however, we have yet to see any signs of winter, so feeling as though I needed to be put in a festive mood, I decided to listen to this holiday staple in my office this week. As I listened to the song, I began to wonder... who is driving that one horse open sleigh?

If the sleigh and its driver were engaged through accessing an app such as Lyft or Uber, it is likely that the driver has been classified as an independent contractor by the company he or she drives for. As we have previously discussed here, there has been significant litigation surrounding whether these types of “gig workers” should instead be classified as employees. However, industry groups and law makers have recently been examining whether the classifications of employee and independent contractor adequately describe these types of workers or whether a third classification should be created to cover workers in the on-demand economy.

What exactly this third classification would look like is unclear at this point. However, one of the primary issues we can expect the classification to address is who, the worker or the company, should shoulder the burden for providing benefits (such as health insurance) and paying payroll taxes. One proposal in this area that has gained some traction is a system of portable benefits in which companies engaging gig workers would pay into a universal fund for workers. The amount of money the company would pay in for each worker would be flexible and reflect the worker’s services in terms of money earned, hours on the job, or tasks performed.

Another issue that we will expect the classification to address is what constitutes compensable time. In the on-demand context, the line between working time and nonworking time is blurred—the traditional test of whether the worker is “engaged to be waiting” or “waiting to be engaged” no longer fits when the worker decides for him or herself whether to accept a task or an assignment.

While it is unknown whether we will eventually see a third worker classification, there is interest among law makers and industry leaders to do something about the legal uncertainty that currently surrounds how to properly classify gig workers. Until that time comes, companies engaging gig workers should carefully analyze how those workers fit into the traditional employer/independent contractor dichotomy.