Don’t Count on Major Change to Contingent Worker Classification in 2016

worker classification Rex Wholster/Adobe Stock

The contingent workforce world shouldn’t get its hopes up for any regulatory changes this year to independent worker classification. Bloomberg BNA’s recently released 2016 Labor Outlook report pointed out that while some lawmakers will take a look at the rising “gig” or “sharing” economy in 2016, actual legislation on these issues will be “slow in coming,” as it is an election year when bipartisan action isn’t likely.

Currently, “sharing” economy workers fall under the umbrella of independent contractors, and are therefore classified by the federal government as such. For instance, independent workers do not receive overtime pay or other benefits employees do, such as workers compensation, and are not eligible for unemployment insurance, the report said. While this seems clear cut, as the number of lawsuits around independent worker issues demonstrates, it is not.

Uber is perhaps one of the most widely known examples of a “sharing economy” business. But the ride-sharing service is also facing a class-action lawsuit in California filed by workers who say the company misclassified them as independent contractors.

The report mentions a possible new type of classification for workers of the growing “gig” and “sharing” economies. The third classification would be for workers who don’t necessarily fit into the existing employee or independent contractor groups. Another option lawmakers and stakeholders are discussing is a possible “time out” period that would allow employers to experiment with different worker classifications without taking on new liability under employment and tax laws, the report said. Other options are also being considered for worker classification, but companies engaging with a contingent workforce are likely to play it safe until new and clear laws are put into place, according to the report.

“Still, sharing economy businesses are unlikely to give that a shot until classification laws and regulations are updated to allow them to do so without taking on full-blown employer liability,” the report said.

Contingent workforce management is a topic Spend Matters has explored extensively in the last year, with coverage led by our research analyst and contingent workforce expert Andrew Karpie. Check out our recent Q&A with Andrew on the continued worker classification challenge.

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