“The misclassification of employees as independent contractors is a serious problem that hurts workers, taxpayers, and the entire economy in multiple ways,” said Michael Felsen, the department’s New England regional solicitor. “It robs employees of their rights to proper wages, safe workplaces, social security payments, and unemployment and workers compensation insurance. It deprives federal and state governments of needed tax revenues. And, it undercuts law-abiding employers who pay their workers legally and play by the rules.”
The "Gig Economy" Explained
The term "gig economy" is fast becoming a common term in the context of employment and the workforce. However, I still find people not quite sure of what it means. This link provides a very helpful infographic to explain the gig economy and how it works. The aspect of the legal risk of misclassification of workers is lightly mentioned towards the end of the infographic under the topic of "Good for Companies", however it is a aspect of the gig economy that has the attention of the government and legal community. It is a polarizing topic as the gig economy is good for business and those who want to work independently, but can also challenge the legal requirements for worker classification. Uber, which is commonly used as an example of the gig economy has been the target of multiple class action lawsuits regarding worker classification. We may eventually find that the gig economy forces the government to modify its requirements for classification of an independent contractor/freelancer...but for now the requirements remain the same and require compliance.
FedEx Settles Driver Misclassification Suit for $240m
FedEx Corp. said Thursday it has agreed to pay $240 million to settle lawsuits in 20 states with drivers, possibly ending a years long legal dispute over whether they were employees or independent contractors.