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Looking at the issue of worker misclassification

Last time, we began discussing the issue of employee classification and the challenges companies in the sharing industry are facing in this area. As we noted, a large reason for the problem is that the current worker classification model is largely binary, recognizing workers as either employees or independent contractors.

In practice, it isn’t always easy to determine the proper classification of a worker given the workers’ relationship with the business. Sometimes, businesses may seek to benefit from the ambiguity, particularly if they feel the workers is not well-informed. Workers who are classified as independent contractors do not need to be provided certain benefits, such as workers’ compensation, so intentional or careless misclassification really is bad way to treat a worker—and it’s illegal. 

According to the New York Department of Labor, there is no single factor or set of factors the courts have established as defining exactly when an employer-employee relationship exists. Courts simply consider all relevant factors in making a determination, and state agencies base their determinations on what court cases have shown. That being said, the more control and direction a business exercises over the manner, means and results of the services provided by the worker, the greater the likelihood that an employment relationship exists. Independent contractors are generally going to be free from the supervision, direction and control of the business in providing services, though details can make a difference.

A business’ intention does not matter in determining worker status—a business can still be held liable for making mistakes regarding classification. For workers who have lost employment benefits as a result of an employer’s mistake—and especially when the misclassification was intentional—it is important to work with an experienced attorney to ensure they receive the compensation they deserve. 

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