Will gig workers be reclassified as employees?

Yesterday, U.S. Labor Secretary Marty Walsh told Reuters that he believes at least some gig economy workers should be classified as employees. As he explained, "We are looking at it but in a lot of cases gig workers should be classified as employees … in some cases they are treated respectfully and in some cases they are not and I think it has to be consistent across the board.”

It’s too early to know whether the Secretary’s views will translate into new rules, or what such rules would look like in practice. Even so, his comments set a tone for what may come next.

According to Reuters, “Walsh said the Department will have conversations with companies that employ gig labor in the coming months to make sure workers have access to consistent wages, sick time, health care and ‘all of the things that an average employee in America can access.’”

Regardless of what happens on the policy front, the Secretary’s comments are a reminder for contracting entities about the importance of worker classification and the interconnected role of workers’ compensation policies.

As I have written about previously, misclassification cases can result in severe financial penalties from the IRS, and potentially in referrals to the Department of Labor or other branches of government for further scrutiny. One of the common triggers for a reclassification case is when an uninsured worker suffers a serious work-related injury and then seeks to be reclassified as an employee to recover medical expenses and lost wages.

The best way for contracting entities to prevent this scenario is to ensure that their contingent workers procure their own workers’ compensation policies. Doing this might soften the popular sentiment that Secretary Walsh seems to share that workers ought to have minimal protections.

1099Policy makes this easy. We enable online labor platforms to offer contractors workers’ compensation policies on-demand at the time of their assignment, with the level of coverage contracting entities specify. Let’s talk about how we can help you.

Photo by ThisisEngineering RAEng on Unsplash.