The so-called gig economy is subject to a great deal of uncertainty in the labor and employment law context. The key issue is whether workers are properly classified as employees and subject to various labor and employment laws or whether they are independent contractors with a lot of flexibility but far less legal protection. This is not a new issue but the prevalence and popularity of gig economy businesses like Uber, Lyft, DoorDash and others have brought the issue into the spotlight.
The traditional test for independent contractor status is multifactored and focuses on the issue of the hiring party's control over the worker. In 2019, California passed a law adopting the "ABC Test," a simple test that classifies almost every worker as an employee. The legal battle over that law in California remains unresolved but the same ABC Test is in the federal PRO Act, which has passed the House but not the Senate. If it passes, the gig economy may not survive and independent contractors may no longer be an option for many businesses. What can employers do in the midst of all this uncertainty?
Listen to the new episode of The Practical Employment Law Podcast for insights on these issues and more.
Comments or questions: Contact Mark Chumley at firstname.lastname@example.org or visit www.kmklaw.com
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