What types of jobs are part of the ‘gig economy’ and is it making workers’ compensation obsolete?
We previously blogged about how Uber is at the forefront of the gig economy and challenging the traditional workers’ compensation model. The gig economy has been described as a labor market devoted to short-term contracts and freelance work as opposed to permanent jobs. Individuals working in the gig economy are classified as ‘independent contractors’ and not protected under state workers’ compensation laws.
The United States Department of Labor has an excellent article about jobs in the gig economy. It uses the term ‘gig’ to describe a “single project or task for which a worker is hired, often through a digital marketplace, to work on demand.” Check out the article for pros and cons of this kind of employment.
Occupations in the gig economy are musicians, graphic designers, artists, web developers, software developers, computer programmers, technical writers, interpreters and translators, photographers, and drivers. Even carpenters, painters, and other construction workers are now included.
Michigan law requires employers purchase workers’ compensation insurance for their employees. This 100-year-old law is considered a safety net for people who get hurt in the workplace. Individuals who take jobs as independent contractors open themselves up to significant risks. Getting hurt on-the-job can result in lifetime medical expenses and loss of income.
Unfortunately, some employers do not give people much of a choice. We see companies game the system by intentionally pay wages as non-employee compensation (IRS Form 1099). This is called employee misclassification and is done to save money on insurance premiums. Failing to purchase required workers’ compensation insurance is a criminal misdemeanor. It also unfairly shifts work accident costs to other payers.
Companies like Uber and Lyft have been accused of employee misclassification and several class action lawsuits have been filed. Lawmakers are scrambling to keep up with these technological innovations. We need to make sure workers’ compensation laws are updated and stay relevant for the millions of people who rely upon this important safety net.
Michigan Workers Comp Lawyers never charges a fee to evaluate a potential case. Our law firm has represented injured and disabled workers exclusively for more than 35 years. Call (844) 201-9497 for a free consultation today.
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