Employment lawyers break down what HR leaders need to know about the worker classification rule
The Biden administration is looking to disrupt the gig economy with a new proposal that would make it easier for workers to be classified as employees rather than independent contractors.
The paradigm shift would grant millions of workers federal protections they currently lack, including benefits such as minimum wage, overtime pay and contributions to unemployment insurance.
Misclassification of workers as independent contractors is a fairly common claim in civil litigation, according to employment attorney Kevin J. White, partner at international law firm Hunton Andrews Kurth LLP, which has offices in Los Angeles and San Francisco.
“Under the Fair Labor Standards Act (FLSA), the allegation is often raised by employees to recover overtime pay they claim to have been denied,” White told HRD. “The claim also arises under state law with employees claiming their employer failed to provide them with state benefits based on their misclassification as an independent contractor.”
Read more: Uber, Lyft shares plummet after Biden gig rule proposal
“So, misclassification litigation by private plaintiffs has been a regular occurrence for some time,” White continued. “A new development is the Biden administration’s vow to provide more administrative oversight of independent contractors and bring more governmental enforcement actions against employers who misclassify workers.”
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