You may have seen or heard the term “gig economy” and asked yourself, what in the devil are they referring to now?
A gig economy is an economic system in which temporary positions are common and organizations increasingly contract with independent workers/contractors for short-term engagements.
Is this a big part of the U.S. economy now?
Yes – and getting bigger all the time. A study by Intuit predicts that by 2020, 40 percent of all American workers will be classified as independent contractors.
This shift has big implications for employers.
As an example, a federal court in San Francisco recently decided a case involving a former GrubHub food delivery driver and his claim that GrubHub owes him for overtime and reimbursement for business expenses.
The employee held that he was an employee of the company’s and that he was entitled to overtime and expenses under California law.
The company took the position that it merely connects customers with restaurants and, to a smaller extent, with delivery drivers. They argued that the driver in question had control over how he provided deliveries, including the hours he worked and the packaging he used for transporting items.
This case is important to employers because it is believed to be the first independent contractor misclassification claim for a member of the “gig” economy to be decided at a trial.
In deciding this important case in GrubHub’s favor, the court found that the company exercised little control over the details of the driver’s work and that the driver was, therefore, an independent contractor and not an employee.
The court pointed out that for a driver to be considered an employee, employers must have significantly more control over the details of the drivers’ work, including the drivers’ schedules, routes, equipment, vehicles, and appearance.
It’s important to note that employers bear the burden of proving that individuals are independent contractors and not employees under the wage and hour laws of many states, including Connecticut.
Because of this fact, it is critical that employers carefully evaluate the status/classifications of all workers performing work for them.
For employers, the process of classifying workers can be complicated. If you have questions about how to determine whether a worker should be classified as an independent contractor or an employee in Connecticut, consider contacting a law firm with extensive experience in this area of the law. The attorneys at Kainen, Escalera & McHale each have over 20 years of experience in all aspects of employment law and the rights of employers. Please contact us if we can help you.
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