Workers Compensation in the On-Demand Economy

What will constitute a good job in the future? With the rise of the on-demand economy, the definition of employment gets ever murkier. And as more companies save money by using contractors rather than employees, workers compensation and other benefits may become more scarce.

In Massachusetts and across the country, employees enjoy certain benefits and protections, including workers compensation insurance — which provides coverage for medical bills and lost wages — unemployment insurance and Social Security, among others. But in a number of recent cases, major employers have become the subject of legal action for classifying workers as contractors to avoid paying for those benefits.

Workers File Class-Action Lawsuits

uber driver in the gig economy - independent contractorIn recent years, high-profile tech companies have come under fire for alleged misclassification of workers. In one widely reported example, ride-sharing company Uber was sued by multiple workers and now faces a class-action suit in California. If the action succeeds, it could force the reclassification of thousands of contract workers as employees, pulling the rug out from under Uber’s business model.

Google also is fighting a class-action lawsuit, filed in Massachusetts by a driver for the company’s Google Express same-day delivery service. The driver contends that Google misclassified her as a contractor, and she’s seeking compensation for overtime pay and additional expenses. The driver notes that as a Google contractor, she was required to wear Google Express uniforms and to work only for Google during shifts. She also says she did not have the option of turning down deliveries.

What Do Workers Lose in the New “Gig Economy?”

Litigation surrounding the on-demand economy has focused on what benefits workers should receive. The driver in the Google Express case argues that although an intermediary courier hired her, she was required to work exclusively for Google for the duration of her shift. Her attorneys contend that under Massachusetts law, she is entitled to overtime and other expenses.

For workers who are classified as contractors, the lost benefits may prove to be costly. Massachusetts state law, for instance, stipulates that independent contractors are not employees and that employers are not required to cover them under the workers compensation system.

Are You an Employee or an Independent Contractor?

Massachusetts’ Executive Office of Labor and Workforce Development advises employers to use caution in ensuring that employees are not misclassified as independent contractors. The state’s Independent Contractor Law states that work arrangements are considered to be between an employer and an employee unless three definitive conditions are in place:

  • The employer must not exercise “control and direction” in how the worker performs the service.
  • The service that a worker provides must be outside the employer’s typical business.
  • The worker must “customarily engage” in a profession or business that is substantially the same as the service rendered.

Speak with an Experienced Workers Compensation Attorney

When on-demand work pays the bills, you may feel hesitant to rock the boat. But if your employer has misclassified you as an independent contractor, you could be missing out on critical benefits like workers compensation. If you are injured on the job in Massachusetts, workers compensation insurance is in place to cover your medical bills, time away from work and other expenses. To ensure that you are correctly classified and receiving the benefits you’re due, consult with an experienced workers compensation attorney. Contact Boston Attorney John J. Sheehan today.

Photo via flickr by Jon Russell