To some, 2015 was the year of the on-demand startup. Through the use of an app, customers could get a ride to the store or find someone willing to deliver their groceries to them. These companies typically rely on independent contractors who are supposedly allowed to set their own hours and act as their own boss. By working with independent contractors, on-demand companies don’t have to carry workers’ compensation insurance or pay Social Security taxes.
However, it is expected that this model will change starting in 2016. Although independent contractors are unable to unionize, Seattle has passed a law allowing for-hire drivers to organize even if they are classified as independent contractors. Popular ridesharing companies Uber and Lyft will likely see lawsuits against them go to trial, and the suit against Uber has been granted class-action status.
The issue of workers’ rights in what is dubbed the 1099 economy may be resolved in favor of the workers regardless of what laws are passed. It may be that on-demand companies decide that the goodwill of offering better conditions for workers outweighs the extra costs that go with it. If this happens, it may signal a day when being a freelancer may be seen as the new normal as it relates to earning a living.
An employee who is injured on the job may be entitled to workers’ compensation benefits. In some cases, a worker who is considered to be an independent contractor may actually be an employee. This is important as independent contractors must generally carry their own insurance. An attorney can assist in determining the proper classification of the claimant.