Increasing numbers of people in New York find themselves working within the gig economy. Companies almost always classify them as independent contractors, which prevents them from enjoying the rights of employees. A case on the West Coast, however, presented an example of an appeals court overturning a lower court's ruling that a taxi cab driver was an independent contractor.
Entrepreneurs who set up businesses in New York sometimes seek to avoid paying employment-related expenses like payroll taxes and disability insurance premiums by classifying workers as independent contractors rather than employees, but doing this can have serious repercussions. The state has pursued cases of worker misclassification aggressively in the past, and an executive order signed by Gov. Andrew Cuomo in July 2016 established a permanent task force to combat the problem.
The New York Court of Appeals decided a case last month concerning the employment rights of yoga teachers employed by the yoga studio, Yoga Vida NYC. The court deemed that the teachers were independent contractors, and therefore they are not entitled to the same benefits employees are entitled to.
Federal regulators continue to scrutinize the practice of misclassifying people as independent contractors when they should be statutory employees. A string of decisions from the National Labor Relations Board should alert employers in New York to the importance of meeting legal standards when classifying workers. A recent memorandum addressing the problem called one employer's designation of truck drivers as contractors an impediment to the workers' ability to exercise their Section 7 rights under Section 8(a)(1).
In a previous post, we discussed how the job market has undergone something of an evolution in recent years, as a significant and growing cross-section of young workers are now choosing to earn a living as independent contractors, wholly embracing the relative freedom afforded by this type of employment.
The vast majority of people make a living as full-time employees working eight hours per day, five days per week from the same location. However, it cannot be ignored that a significant and growing cross-section of workers -- including many young adults -- are now earning their money as independent contractors, working non-standard hours from all manner of locations.