Every worker is classified as either an independent contractor or employee. This classification is not just a meaningless label—employees have far more rights and are entitled to more benefits than independent contractors. It can be difficult to distinguish between an independent contractor and employee, especially when it comes to workers in the gig economy. If you are a gig worker, it’s important to understand how you should be classified by your employer.
How Gig Workers Were Classified Under the Obama Administration
The U.S. Department of Labor under the Obama administration used the “economic realities” test to determine if a worker was an independent contractor or employee. This test focuses on how economically dependent the worker is on their employer. If a worker was economically dependent on an employer, he should be classified as an employee instead of an independent contractor. Therefore, most workers in the gig economy would be classified as employees using this test.
How Are Gig Workers Classified Today?
The guidance document that mentioned the “economic realities” test was removed from the Department of Labor’s website shortly after President Trump took office. The Department of Labor did not replace this document with another one, so it was not clear how the new administration would define an employee vs. an independent contractor.
In April, a company in the gig economy asked the Department of Labor whether it would be appropriate to classify their gig workers as independent contractors. The Department of Labor responded to this inquiry by approving the company’s decision to classify gig workers as independent contractors rather than employees.
In their response, the Department of Labor explained that the gig workers are independent contractors for a number of reasons, including:
- The employer does not have much control over the gig worker.
- The gig worker has a flexible work schedule and has the freedom to leave the working relationship at any time.
- The workers’ services were not integrated with the business’s services.
The Department of Labor’s response only applies to the company that submitted the inquiry. However, it’s safe to assume that the response indicates that the Trump administration does not believe that gig workers should be classified as employees. This could make it harder for gig workers to fight for the workplace rights and benefits they deserve.
Are you a worker in the gig economy? If your employer is violating your rights, contact Armstrong & Vaught, P.L.C. at once. Our attorneys will work tirelessly to hold your employer accountable and protect your rights. Call us at (918) 582-2500 or toll-free at (800) 722-8880 or complete the simple form below for a free consultation with a skilled attorney.