How Employment Law is Shifting in a Post-COVID Economy

The pandemic has left the U.S. job market more uncertain than usual. Even though July saw a return to form for the labor pool, with the Bureau of Labor Statistics reporting 943,000 new open jobs in July and an unemployment rate hitting pandemic lows of 5.4%, the amount of workers securing full-time work with benefits is likely to drop.

Gig work became the new normal for many laborers seeking a safety net during the pandemic, with some 59 million Americans freelancing in 2020, and few signs of a slow down. And as more companies signal an increased reliance on non-payroll workers, as research by contractor management company Stoke found in a June survey, this means further pressure to adjust employment law to suit the times.

How is the pandemic’s acceleration of the gig work economy affecting how companies build out their employment & labor law strategies, especially after the last two years of regulatory moves to redefine contract workers from the State of California, and the subsequent gig company win with Prop 22? We sought the perspective of Lauren Blair, Employment & Litigation Attorney, and founder of Lauren Blair Consulting, to help us understand the dynamics shaping relationships between employees and their employers.

More Thoughts from Lauren Blair

Companies need to be careful in classifying workers as independent contractors versus employees. The most important factors when looking at classifying a worker as an employee or a freelance contractor are whether the hiring party has the right to control the manner and means by which the work is accomplished.

There are also other considerations that come into play, such as: (1) source of instruments and tools; (3) location of the work; (3) duration of the work relationship; (4) exclusivity of the work relationship; and (5) whether the work is part of the hiring party’s regular business.

If a Department of Labor or court determines that the classification was improper, the company could face serious financial and legal consequences, including back pay for minimum and overtime wages, vacation pay and other remunerative employment benefits, and under some state laws, fines and even misdemeanor criminal liability in cases of intentional misclassification.

Lauren Blair is a lawyer with FreeAdvice.com. She has over 25 years of experience in employment law.

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