Question of the Month

October 2019

Question
In your state/province, what is the current status of gig economy worker laws?
Answer from Alabama

Nothing in Alabama.

For more information please contact Michael Thompson at mthompson@lehrmiddlebrooks.com

*Disclaimer: All answers to the Question of the Month are current the day on which they are posted. After this date, the information may subsequently change as a result of laws or rulings. For the most current information, please contact the responding lawyer for each state in which you are interested.

Answer from California

The entire status of the gig economy in California suffered a blow with the California Supreme Court’s 2018 decision in Dynamex Operations West, Inc. v. Superior Court of Los Angeles, which drastically changed the test for determining who qualifies as an independent contractor under the California Wage Orders.  In Dynamex, the Court announced individuals are presumed to be employees, and that entities classifying individuals as independent contractors will have the burden to establish all of the following elements of the “ABC test”: (A) that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact; (B) that the worker performs work outside the usual course of the hiring entity’s business; and (C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.   

Whether the ABC test will be expanded to issues beyond California’s Wage Orders has yet to be seen, but California employers have been reclassifying independent contractors as employees to avoid the risks of wage-and-hour lawsuits in the future.

For more information please contact David Wimmer at dwimmer@swerdlowlaw.com

*Disclaimer: All answers to the Question of the Month are current the day on which they are posted. After this date, the information may subsequently change as a result of laws or rulings. For the most current information, please contact the responding lawyer for each state in which you are interested.

Answer from Florida

This has not been addressed at the state level.

For more information please contact Wayne Helsby at whelsby@anblaw.com

*Disclaimer: All answers to the Question of the Month are current the day on which they are posted. After this date, the information may subsequently change as a result of laws or rulings. For the most current information, please contact the responding lawyer for each state in which you are interested.

Answer from Georgia

Although Georgia law recognizes the “gig” economy in transportation by car, there is an effort to define “employee” and “independent” contractor by statute.

For more information please contact Doug Duerr at duerr@elarbeethompson.com

*Disclaimer: All answers to the Question of the Month are current the day on which they are posted. After this date, the information may subsequently change as a result of laws or rulings. For the most current information, please contact the responding lawyer for each state in which you are interested.

Answer from Hawaii

There are no laws specifically regarding “gig workers" in Hawaii.

For more information please contact Megumi Sakae at MSakae@marrjones.com

*Disclaimer: All answers to the Question of the Month are current the day on which they are posted. After this date, the information may subsequently change as a result of laws or rulings. For the most current information, please contact the responding lawyer for each state in which you are interested.

Answer from Maryland

At this time, there is not any proposed legislation specifically addressing the gig economy. However, the Maryland Department of Labor, Licensing and Regulation (“DLLR”) has a particular interest in the issue of employee misclassification – when an employee is improperly designated an independent contractor. In 2016, new penalties were added for the knowing misclassification of workers: no more than $5,000 per employee for a first violation and $10,000 per employee for subsequent violations.

In Maryland, whether an individual is deemed to be an employee or an independent contractor is subject to different tests, depending on the law at issue. For example, the Unemployment Insurance law and the Workplace Fraud Act (which applies only to the landscaping and construction industries) utilize the ABC test, under which a worker is presumed to be an employee unless all of the following are met: (A) The individual is free from direction and control; (B) The individual customarily is customarily engaged in an independent business of the same nature as that involved in the work; and (C) The work is outside the usual course of business of the person for whom it is performed OR the work is performed outside any place of business of the person for whom it is performed. The Workers’ Compensation Act and common law, however, apply a “right to control” test, under which the employer/employee relationship is found when the employing entity has the right to control and direct the individual performing the services as to the result as well as the details and means by which that result is accomplished.

For more information please contact Fiona Ong at fwo@shawe.com

*Disclaimer: All answers to the Question of the Month are current the day on which they are posted. After this date, the information may subsequently change as a result of laws or rulings. For the most current information, please contact the responding lawyer for each state in which you are interested.

Answer from Massachusetts

Massachusetts has one of the most restrictive independent contractor statutes in the United States. See Mass. Gen. L. Ch. 149, §148B.  The statute contains a three-prong test to establish that someone is an independent contractor: (1) the individual is free from control and direction with the performance of the service, both under his contract and in fact; (2) the service is performed outside the usual course of business of the employer; and (3) the individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed.  If any of the above statements are not true regarding an individual’s work, the worker must be classified as an employee.  Under the law, it is the employer’s burden to prove that all three prongs of the independent contractor test are met.  If an individual is misclassified as an independent contractor, s/he may institute a lawsuit against the business and seek mandatory triple damages, attorney's fees, and costs under the Massachusetts Wage Act.  There are no anticipated updates to this statute in the near future.

For more information please contact Marylou Fabbo at mfabbo@skoler-abbott.com

*Disclaimer: All answers to the Question of the Month are current the day on which they are posted. After this date, the information may subsequently change as a result of laws or rulings. For the most current information, please contact the responding lawyer for each state in which you are interested.

Answer from Minnesota

There have been no new laws or regulations specifically regarding gig economy employment so far.  Under Minnesota law, the determination of whether an individual is an independent contractor or an employee is based on a multi-factor test.  In general, the factors that a court may consider are:
    1. Control of method and manner of performance;
    2. Right to discharge;
    3. Availability to the public;
    4. Compensation on job basis;
    5. Realization of profit or loss (including providing access to office, equipment, materials, or other facilities);
    6. Termination (worker’s right to terminate the relationship without incurring liability for noncompletion of the employment);
    7. Substantial investment (in facilities used in performing services for another indicates an independent contractor status);
    8. Responsibility (if an employing unit is responsible for negligence, personal behavior, and work actions of an individual in contact with customers and the general public during time that services are performed for the employing unit, an employment relationship is indicated); and
    9. Services fundamental to business (employment is indicated where the services provided are necessary to the fundamental business purpose for which the organization exits).

Minnesota Rules, part 5224.0340, subpart 1 – 9.

In September 2017, a Minnesota Uber driver filed a proposed class action against Uber and its subsidiary, Raiser, Inc., asking the Court to classify drivers as employees, not independent contractors. Sienkaniec v. Uber Technologies, Inc. and Rasier, LLC, 17-CV-04489. The driver is sought unpaid wages tips, and unreimbursed expenses. Id. The driver alleged Uber exercised “complete dominion and control over its drivers in the performance of their duties,” and therefore, drivers are employees. Id. The case was, however, sent to arbitration due Uber’s arbitration agreement.  Others lawsuits regarding gig workers are likely in the coming months and years.

For more information please contact Tom Revnew at trevnew@seatonlaw.com

*Disclaimer: All answers to the Question of the Month are current the day on which they are posted. After this date, the information may subsequently change as a result of laws or rulings. For the most current information, please contact the responding lawyer for each state in which you are interested.

Answer from Nevada

Nevada has not enacted any laws specific to gig economy workers. As Nevada’s biennial legislature meets this year, Nevada employers are wise to keep a close eye on legislative developments. As of the start of the legislative session on February 4, 2019, nothing specific to gig economy workers has been proposed.

For more information please contact Scott Abbott at SAbbott@kzalaw.com

*Disclaimer: All answers to the Question of the Month are current the day on which they are posted. After this date, the information may subsequently change as a result of laws or rulings. For the most current information, please contact the responding lawyer for each state in which you are interested.

Answer from Ohio

In Ohio, none yet.  Ohio typically lags behind the more progressive states.

For more information please contact Lynn Schonberg at lynns@rbslaw.com

*Disclaimer: All answers to the Question of the Month are current the day on which they are posted. After this date, the information may subsequently change as a result of laws or rulings. For the most current information, please contact the responding lawyer for each state in which you are interested.

Answer from Pennsylvania

In Pennsylvania, gig economy workers are covered by traditional independent contractor principles.  The Commonwealth has not enacted any special laws to regulate the gig economy.  However, in 2018, the Pennsylvania Commonwealth Court held that a terminated employee who became an UBER driver was not self-employed under the unemployment compensation law (and hence eligible for unemployment benefits).  Lowman v. Unemployment Comp. Bd. of Review, 178 A.3d 896 (Pa. Commw. 2018).  The Lowman case has been appealed to the Pennsylvania Supreme Court, which is expected to hear the matter this year.

For more information please contact John Ellis at jellis@ufberglaw.com

*Disclaimer: All answers to the Question of the Month are current the day on which they are posted. After this date, the information may subsequently change as a result of laws or rulings. For the most current information, please contact the responding lawyer for each state in which you are interested.

Answer from Texas

Nothing in Texas.

For more information please contact Bryant Banes at bbanes@nhblaw.com

*Disclaimer: All answers to the Question of the Month are current the day on which they are posted. After this date, the information may subsequently change as a result of laws or rulings. For the most current information, please contact the responding lawyer for each state in which you are interested.

Answer from Virginia

Virginia does not have any particular laws focused on “gig economy workers.”  Governor Northam issued an executive order in August 2018 creating a task force on worker misclassification and payroll fraud. The task force is supposed to “develop and implement a comprehensive plan with measurable goals, including identifying ways to hold companies working on state contracts who commit payroll fraud through misclassification of workers accountable, and identifying ways to deter future inappropriate conduct by recommending enforcement mechanisms.”  The group is supposed to have developed a work plan by November 1, 2018 and to report to the Governor on its progress by August 1, 2019

For more information please contact Susan Carnell at scarnell@lorengercarnell.com

*Disclaimer: All answers to the Question of the Month are current the day on which they are posted. After this date, the information may subsequently change as a result of laws or rulings. For the most current information, please contact the responding lawyer for each state in which you are interested.

Answer from Washington

There are no new updates in Washington.

For more information please contact Ken Diamond at ken@winterbauerdiamond.com

*Disclaimer: All answers to the Question of the Month are current the day on which they are posted. After this date, the information may subsequently change as a result of laws or rulings. For the most current information, please contact the responding lawyer for each state in which you are interested.

Answer from Wisconsin

Currently there are no state specific gig economy worker laws. The recent change in leadership in the governor’s office may lead to future updates. For example, on April 15, 2019 Governor Evers created the Joint Task Force on Payroll Fraud which has a main task of preventing worker misclassification.

For more information please contact Laurie Petersen at LPetersen@lindner-marsack.com

*Disclaimer: All answers to the Question of the Month are current the day on which they are posted. After this date, the information may subsequently change as a result of laws or rulings. For the most current information, please contact the responding lawyer for each state in which you are interested.

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