U.S. Department of Labor Addresses Contractor Classification

Тhe U.S. Department of Labor recently issued an opinion to help guide the operation of online platforms or “virtual marketplaces” for contractors and gig workers. That opinion (addressing an unnamed virtual marketplace) covered the perennial question of how to classify flexible talent, and, most importantly, whether an online platform ran the risk of being considered the “employer” of gig workers who use the technology. The answer confirmed that workers using the marketplace were not, in fact, employees of that platform, so the service is not subject to Federal Wage and Hour laws that apply to workers classified as employees.

On a related note, the National Labor Relations Board recently adopted a more employer-friendly position regarding the classification of workers (in this case, Uber drivers) as contractors. Reversing aspects of its 2014 decision that drivers working for large companies are not necessarily independent contractors (in that case, FedEx was the employer), the new position makes it easier to determine that drivers are contractors and thus treats them as independent workers instead of as employees.

Takeaway: Employers should keep abreast of classification regulations while acknowledging that federal opinions may not always end such issues as state regulations may have differing parameters. Learn more here.