The ‘Gig Economy’ and Your Wage Rights as an Independent Contractor

A very interesting article was recently posted in the New York Times Op-Ed about the problem of the “gig economy.”

Technology companies, such as Uber and Lyft, tout the benefits of the “gig economy,” in which workers are designated as independent contractors, not employees. The problem is, independent-contractor status often does not benefit workers.

Being an independent contractor is, theoretically, beneficial because workers are their own boss, working whenever and as much as they want. However, the companies are typically the real beneficiaries of the independent contractor designation. This is because independent contractors are typically exempt from the protections of the Fair Labor Standards Act (FLSA), the federal statute that governs the payment of wages, such as a minimum wage or overtime pay. Accordingly, companies can entice workers to work long hours for low pay and without overtime.

Because of the lower associated costs, companies often misclassify employees as independent contractors. The problem is so rampant that the United States Department of Labor (DOL), the federal agency that enforces the FLSA, is actively working with the IRS to combat employee misclassification.

This is important because being misclassified not only denies workers wages to which they are entitled, but it can also affect their eligibility for programs such as Social Security retirement and unemployment.

If you think that you have been misclassified as an independent contractor, the attorneys at Lebau & Neuworth may be able to help. We are experienced at handling cases involving employee misclassification and unpaid wages. For more information, contact us at 888-456-2529 or lebauneuworth.com/contact-us.