Debate surrounding Uber drivers and workers’ compensation continues.
I read an interesting article from the Alaska Dispatch News regarding a $77,925 fine paid by Uber over unpaid workers’ compensation insurance. Uber operated in Anchorage for six months before pulling out of Alaska entirely. This fine settled an ongoing investigation about whether Uber drivers were actually employees and not independent contractors. It is expected that the Alaska Legislature with take up the matter during its next session.
The issue of independent contractor status for Uber drivers continues to be furiously debated around the country. It is an industry disrupting technology and will have widespread affects. We anticipate more litigation and legislative activity in the coming years.
Michigan has not seen any Uber specific action just yet. However, it has seen its fair share of controversy when it comes to employee misclassification. This is done when a company intentionally classifies its employees as independent contractors to avoid paying the cost of workers’ compensation insurance and taxes.
Amendments to Michigan’s workers’ compensation law in 2011 changed who is considered an employee. On and after January 1, 2013, services are employment if the services are performed by an individual whom the Michigan Administrative Hearing System determines to be in an employer-employee relationship using the 20-factor test in IRS revenue ruling 87-41.
IRS revenue ruling 87-41 requires a weighing of 20 common law factors. These include (1) Instructions; (2) Training; (3) Integration; (4) Services Rendered Personally; (5) Hiring, Supervising, and Paying Assistants; (6) Continuing Relationship; (7) Set Hours of Work; (8) Full Time Required; (9) Doing Work on Employer’s Premises; (10) Order of Sequence Set; (11) Oral or Written Reports; (12) Payment by Hour, Week, Month; (13) Payment of Business and/or Traveling Expenses; (14) Furnishing of Tools and Materials; (15) Significant Investment; (16) Realization of Profit or Loss; (17) Working for More Than One Firm at a Time; (18) Making Service Available to General Public; (19) Right to Discharge; (20) Right to Terminate.
Adoption of IRS revenue ruling 87-41 seems to return Michigan to the old economic reality test. It appears that control will be a major factor in the determination of employment status. Keep checking our blog for additional developments as they occur.
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 (855) 221-2667 for a free consultation today.
Photos courtesy of Creative Commons, by maheshone.