I recently wrote about the January 25 decision from the National Labor Relations Board that makes it easier for businesses to classify their workers as independent contractors (SuperShuttle DFW, Inc.). You can read the full article here. In a nutshell, now that the Board is comprised of Trump appointees and majority Republican, it reversed a 2014 Obama-era decision that claimed to have “refined” the independent contractor test, but in practical terms, had made it harder to classify workers as contractors. The SuperShuttle case overturned the 2014 case and returned to a more balanced standard, one that gives more of an equal weight to both the right-to-control aspects of the relationship and the role of the workers’ entrepreneurship in operating their own businesses.
Imagine one of your worst corporate nightmares comes true: a government body has determined that you have misclassified your workers, and they should be considered employees and not contractors. The ramifications could be devastating for your organization. You could be on the hook for overtime or minimum wage payments in the tens (or hundreds) of thousands of dollars, you may have unemployment insurance consequences to face, you may have an obligation to provide a cache of benefits to your workers, and perhaps even workers’ compensation insurance issues could arise. Your very business model may be threatened. But if certain administrative law judges had anything to say about it, your trouble could be just beginning: you could also be facing an automatic unfair labor practice (ULP) charge on top of your other worries.
Josh Eidelson from Bloomberg reported that the National Labor Relations Board (NLRB) issued a complaint against gig economy mainstay Handy earlier this week, alleging that the on-demand workers who provide home cleaning services through its online platform are actually employees and not independent contractors. The complaint was issued on August 28 out of the NLRB’s Boston office; a copy has not yet been made public, but if Eidelson’s report is accurate (and there is no reason to think it isn’t), this is a troubling sign for gig businesses.