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Executive Forum: The independent contractor compliance question

February 12, 2016

Ride-sharing service Lyft agreed to pay $12.25 million to settle a lawsuit brought by drivers who claim misclassification as independent contractors. On the flip side, the 11th Circuit Court of Appeals ruled this month that a staffing firm was correct to classify its stagehands as independent contractors.

Independent contractor misclassification remains a challenge for the contingent workforce world — and not just in the US.

Often, workers may prefer independent contractor status. But authorities, concerned about collecting taxes, can see red flags. And governments are taking steps to tackle the problem.

“However, enforcement is just one side of the problem,” according to Fiona Coombe, director of legal and regulatory research at Staffing Industry Analysts. “In most jurisdictions, the classification of employment status depends on the right of the putative employer to control the worker. In practice, the determination of control is a complex exercise involving an investigation of all the facts of a specific relationship between the worker and the employer.”

Coombe continued, “As a result, lawmakers are looking at alternatives such as imposing arbitrary time limits on assignment length before the worker is deemed an employee as in the UK; converting the relationship into an open-ended employment relationship as in Italy; or extending liability for unpaid taxes to the engager of the personal services as in the Netherlands.”

Independent contractor classification and other legal and regulatory issues — including the latest trends on the Affordable Care Act in the US — will be discussed during a panel called “Topical Legal Issues From ACA to ZZP. It will be led by Coombe on Feb. 23 at the Staffing Industry Executive Forum in Phoenix.

Panelists will include:

  • Kevin Barrow, partner, Osborne Clarke LLP
  • Edward Fensholt, senior VP, Director, Compliance Services, Lockton Companies
  • Edward A. Lenz, senior counsel, American Staffing Association
  • George Reardon, principal, George M. Reardon, Attorney and Counselor at Law