New Jersey and Seattle Announce Changes for Gig Workers
New Jersey and Seattle are amongst the growing number of states starting to expand rights for workers classified as independent contractors (IC’s).
The Seattle City Council voted unanimously on June 1st to require app companies such as Uber, DoorDash and others to offer their Seattle workers paid sick days due to the accelerated use of home delivery services during the COVID-19 pandemic.
Additionally, The New Jersey Senate Labor Committee advanced a bill on June 4th that would require gig economy companies to provide benefits for their New Jersey-based workers.
Under the bill the Senate committee advanced on Thursday, “contracting agents” such as Uber who have more than 50 workers in New Jersey are required to help pay into worker’s benefits package. The companies would be required to pay benefits for each worker, based on the number of hours worked or a percentage of money that was made.
What are the long term impacts of these changes?
The changes in both states come amidst the broader discussion on how to treat gig workers in an ever-changing economy. After California debated the issue of worker misclassification, New Jersey and New York are also considering legislation that has the potential to redefine whether gig workers should be treated as company employees, not independent contractors.
The government’s CARES Act signed into law on March 27th gave states the option of extending unemployment benefits to independent contractors and other workers who usually not eligible to claim unemployment benefits. This highlighted the prominent problem of worker misclassification due to a huge surge of Independent Contractors filing for unemployment.
The government is most likely building up a database of these IC’s and at some stage may wish to recoup these costs, meaning they will likely look back to see if IC’s were classified correctly.
What does this mean for your business?
It is clear that the risk of engaging IC’s has increased. If you believe your business has been engaging IC’s in a non-compliant way it is time to take a step back and review your processes. If the government decides to process an audit all parties will be brought to the able, whether you are engaging IC’s yourself, using a supplier or are one party in the supply chain. Minimise your risk and make sure you are 100% complaint in the policies you have in place and protect your business by doing so.
It is crucial to remain compliant and classify a worker correctly as either an employee or an independent contractor. If you need help, get in touch and we can manage this for you.