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The gig economy presents opportunities for both workers and employers. While workers can gain flexibility and focus on finding gigs that interest them, employers can avoid many of the costs associated with hiring full-time or part-time employees.
But, while hiring gig workers can be a cost-effective alternative (or supplement) to maintaining an in-house workforce, employers that hire gig workers need to ensure that they understand the legal issues involved. Missteps can prove costly—and they can generally be avoided with a proactive approach to employment law compliance.
What Employers Need to Know About Hiring Gig Workers
So, if you own or run a company, what do you need to know before you hire gig workers? While the law treats employees and independent contractors (i.e., gig workers) differently, independent contractors are still entitled to certain rights and protections. Additionally, even if a statutory right or protection doesn’t apply, it may still be in an employer’s best interests to extend comparable benefits to its gig workers. With this in mind:
Employers Must Properly Classify Their Gig Workers
Gig workers will be properly classified as independent contractors in most cases. The distinction between employees and independent contractors is important for several reasons, from tax compliance to the anti-discrimination and anti-harassment protections that apply. Employers should take adequate steps to document the nature of their relationship with their gig workers, and they should ensure that they do not exert too much control over their gig workers—which can lead to gig workers being reclassified as employees.
Gig Workers Are Entitled to Certain Statutory Protections
While gig workers are not entitled to all of the same statutory protections as employees, certain statutory protections still apply. These include Section 1981’s prohibitions on discrimination, among others. When hiring gig workers, employers must ensure they have a clear and comprehensive understanding of their legal obligations at the state and federal levels.
Written Contracts Can Benefit Both Parties
Written contracts between employers and gig workers can benefit both parties. They can clarify the parties’ respective responsibilities, and when gig workers are producing work products, written contracts are essential to assign ownership of all intellectual property rights in the work product to the employer. Employers can also use independent contractor agreements to document gig workers’ rates, impose confidentiality obligations, and establish the right to specific remedies for gig workers’ violations.
Employers Should Carefully Review Their Handbooks, Policies and Procedures
Depending on how they are written, an employer’s handbooks, policies, and procedures may (or may not) apply to employees and independent contractors. Employers should carefully review these documents to ensure that they have a clear understanding of their implications—and they should make revisions as necessary to reflect their use of gig workers.
Speak with an Employment Lawyer at Rendigs
Do you need to know more about the legal implications of hiring gig workers? If so, we invite you to get in touch. To speak with an employment lawyer at Rendigs, please call 513-381-9200 or request a consultation today.
