Capitol Correspondence - 05.04.19

DOL Ruling on “Gig Economy” Workers Gives Broader Insights into How Trump Admin Distinguishes Between Contractors and Employees

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ANCOR is sharing this article by Wired because despite its focus on the “gig economy” (e.g. Uber, GrubHub, TaskRabbit), the guidelines laid out on how the Trump Administration distinguished between employees and independent contractors could be informative for our members in their function as employers.

As written by Wired:

“Are gig-economy workers really just contractors, or should they be classified and compensated as employees? On Monday, the US Department of Labor hinted at an answer, writing in [an opinion letter] to one gig-economy company that its workers are, in fact, independent contractors.


The opinion issued Monday applies only to the company addressed in the letter and isn’t legally binding. But it was still broadly viewed as a win for gig businesses.


The letter doesn’t identify the company in question, but it includes some telling clues about how the Trump administration’s Department of Labor distinguishes between contractors and employees. […]

First, it considered how much control the employer has over workers. […]

Next, the department assessed the workers’ “permanency” and found that they “appear to maintain a high degree of freedom to exit the working relationship,” another indication of a contractor relationship. The department also concluded that workers paid for their own facilities and equipment. […]

Two other considerations included how much skill the work requires and the workers’ potential for profit and loss. The department said it didn’t have any information on the workers’ skills in this case, but the fact that workers could negotiate their own pricing and accept or reject work across a number of competitors were all indications that the workers, not the company, controlled profits and losses.

Finally, the department looked into how ‘integrated’ into the business the workers’ services are.”