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09 Nov 2018
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By Maslow
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Blog

Getting Ahead of Compliance in the Bustling Gig Economy

In today’s society, hiring a short-term freelancer or independent contractor to perform core functions for your business can be tricky, to say the least. When a job performed by episodic workers mirrors that of your employees, the potential for confusion can skyrocket, and result in numerous compliance penalties and more.

With the recent explosion of the gig economy and a growing on-demand workforce, this uncertainty is steadily building to a crescendo.

Independent contractors have become the fastest growing segment of our country’s workforce. They are expected to surpass half of all workers within a decade.

Thanks to the advent of Uber, Lyft, and similar outfits providing an on-demand workforce, the subset of the short-term gig economy has made payroll and HR compliance increasingly difficult to navigate.

The United States continues to operate under a full-time employment model, which takes factors such as wage and hour laws, Social Security taxes, pay and health benefits, and more into consideration. Thus far, episodic or gig workers do not have similar protections under state or Federal law, which has prompted various litigation.

Making the distinction between employee and independent contractor has long been a source of controversy and disgruntlement for business owners and HR departments. Hiring parties must consider the following when bringing a gig worker onboard a project to sidestep potential misclassification woes:

  • Gig workers exhibit attributes of both independent contractors and employees. To make an accurate distinction, focus on how independent contractors are UNLIKE employees. An independent contractor typically does not:
    • Receive training by the hiring firm.
    • Receive performance evaluations.
    • Wear a uniform.
  • Many disreputable employers attempt to create workarounds, misclassifying employees as independent contractors to avoid paying for benefits, etc. Avoid accusations. Apply the most stringent employee and independent contractor laws applicable when using an on-demand workforce and be aware of the specific jurisdictions pertaining to both the worker and your company.
  • Steer clear of inserting yourself into a gig worker’s work life. You are not his or her employer. Doing so could blur the lines. (Protection from harassment, of course, applies 100% regardless of whether the individual is an employee or a gig worker.)
  • Outsource your payroll and HR functions. Maslow Media Group can help with this. We regularly protect our clients from misclassification of employees and independent contractors, and we have experience in managing gig workers in a variety of industries.

Give us a call at 202-965-1100, or reach out to us online to learn more.

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Written by Maslow