January 21, 2024
US Department Of Labour Could Override State Laws On "Employee vs. Independent Contractor" Status For Gig Workers
We have been predicting and warning people that these changes were on the way and were part of a broader set of challenges governments all over the world are looking to solve.
The challenges these governments are looking to solve is the erosion of the tax base and social security systems (Governmental Unemployment Benefits & Government Pension)
The UK was the 1st country in the world to make a very large transition from traditional employment to "Gig" or "Independent Contractor" status; and it started with Knowledge Workers (White Collar Gig Workers) as opposed to traditional Blue Collar (Transport) work. The result was IR-35 legislation being passed.
The trend in the UK started in the mid-2000's so they are way ahead of the curve for the rest of the world.
We predict global tax authorities will learn from the UK hard reality of this development.
KEY NOTES FROM THE ARTICLE
- Uber drivers and other gig economy workers might be reclassified as employees under a fresh Department of Labor regulation starting in March.
- This rule change is already being contested in court by freelance writers who prefer to maintain their status as "independent contractors" rather than becoming employees.
- Unlike contractors, employees are eligible for overtime pay, minimum wage, and other benefits. While contractors appreciate the flexibility, experts in employment law suggest that employers could provide flexible hours even with employee status and its accompanying benefits.
ARTICLE SOURCE: https://www.investopedia.com/new-worker-classification-rule-could-disrupt-the-us-gig-economy