From JDSupra, Ariel Kelly discusses the advantages and disadvantages of engaging with gig workers and then provides guidance for avoiding misclassification of gig workers. Ariel writes:
Best Practices to Avoid Misclassification of Gig Workers:
For companies to reap the benefits of engaging gig workers, the workers must be properly classified. In fact, misclassification of a gig worker could result in significant financial consequences for a company. For example, a misclassified gig worker who should have been classified as an employee may be entitled to rights under federal, state and local wage/hour, discrimination, and other employment laws. This means that companies that do not properly classify their gig workers could be required to pay back pay, including overtime compensation, employee benefits, workers’ compensation benefits, insurance premiums, social security, unemployment, tax obligations, liquidated damages, and civil monetary penalties.
In an effort to assess and reduce legal risk, companies should consider the following before engaging a gig worker:
- Definition of the scope of engagement;
- Necessity and suitability of written agreements to define the work relationship;
- Creation of separate policies applicable to gig workers and traditional employees who work for the same company;
- Determination of pay structure; and
- Determination of responsibility for expenses and overhead costs of gig workers.
Read the full story at Employment Law Considerations For Engaging Gig Workers | Dickinson Wright – JDSupra