Amanda DeMatteis: Hi, Josh.
Josh Goodbaum: Hi, Amanda. What are we talking about today?
DeMatteis: I thought we would talk about the classification of a person as an employee or as an independent contractor. We’ve heard about this quite a bit. In fact, the 119th Congress is set to take up a bill, H.R. 1319, which seeks to clarify whether or not an individual is an employee and amend the Fair Labor Standards Act (FLSA) and the National Labor Relations Act (NLRA).
So, why is this important? We’ve seen this come up in California a bit with gig workers – Uber drivers or others. Does it matter if a person is classified as an employee vs. an independent contractor?
Goodbaum: Yeah, it really does matter, Amanda, for at least five reasons. Let me run through them quickly.
First: Almost all of the civil rights we think of as protecting working people in this country apply only to employees. Your right to be free from sexual harassment, from other forms of discrimination, from retaliation? Those are rights enjoyed by employees, not by independent contractors.
Second: Think about the right to earn a minimum wage or to receive overtime for work more than 40 hours in a week. Those are typically rights enjoyed by employees, not by independent contractors.
Third: In many states, employees are entitled to certain benefits. They’re entitled to health insurance. They’re entitled to PTO. They’re entitled to breaks. Independent contractors don’t have many of those rights.
Fourth: Under the National Labor Relations Act, as you mentioned, employees have the right to form unions and to bargain collectively and to act for their mutual aid and protection. Independent contractors don’t have those rights.
Fifth: Employees have a different method of paying taxes than do independent contractors. It’s complicated whether employees or independent contractors pay more in taxes at the end of the day. But it is clear that an employer is going to contribute to employment-related taxes for employees and to withhold taxes for employees; those things don’t happen for independent contractors.
So, those five reasons are why it really matters whether a working person is classified as an employee or an independent contractor.
DeMatteis: Really something to think about if you are a Connecticut worker who is being paid as an independent contractor. Might be worth talking to an employment lawyer as to whether or not that classification is the right one.
Thank you, Josh, and thank you for watching. Take care.