Department of Labor issues opinion on gig worker classification

On Behalf of | May 2, 2019 | Fair Labor Standards Act (FLSA) |

The United States Department of Labor issued an important opinion recently about who is considered an employee of a company. The question the department was answering was whether or not workers in the gig economy qualify for the protections that the Fair Labor Standards Act provides to employees. The DOL has stated that in a letter that gig workers are contractors, so they don’t qualify for the same protections as employees.

The question came up when a lawyer who worked for a cleaning company sought clarification on how the company’s gig workers should be classified. This letter affects delivery drivers for companies like Instacart and Shipt, as well as rideshare drivers for companies like Lyft and Uber. Even individuals who manage apartments on Airbnb are impacted by the statement.

Since this opinion letter has come out, it has been said that these individuals aren’t entitled to overtime pay or minimum wage. This has caused some disagreement over the matter because many people are concerned that it will lead to an abuse of the workers. Some claim that the opinion is incorrect because these workers are sometimes treated as employees, such as those who work for some cleaning companies like Handy or Task Rabbit.

While this is only an opinion and not a legal ruling, employers and workers alike should understand what it means. There is a chance that the issue might be presented to the courts eventually. Ultimately, employers must ensure they are classifying all workers appropriately. If they don’t, a misclassified worker may be able to pursue legal action against that employer.