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Workers should make sure their classification is correct

On Behalf of | May 21, 2019 | Fair Labor Standards Act (FLSA), Firm News

Just last week, Uber drivers all over the country went on strike. They protested their low pay and called for more benefits. After all, they were the ones providing Uber with their most essential services. So, they believed that the company should treat them as employees instead of contractors.

Whether this is a situation of misclassification or not is yet to be seen. However, this does shed light on the issues that misclassified workers could face.

The FLSA does not cover independent contractors

The rights that employees receive under the Fair Labor Standards Act (FLSA) generally depend on the existence of an employment relationship. It is this relationship that holds employers and employees accountable to each other.

The factors that determine this relationship include:

  • The employer can determine how the employee completes their work
  • What the employee’s service provides to the company
  • How the employee receives payment

Independent contractors have a very different working relationship with employers. They essentially run their own business, so they are often temporary workers hired to complete a specific project. And they receive payment for the work they complete.

Therefore, the FLSA only applies to workers classified as employees, but employers do not always classify that relationship correctly.

Misclassification is a common problem

Most employers do not report that they have misclassified their workers, so there is no specific number of how many incidents of misclassification there really are. However, a study by the National Employment Law Project determined that nearly 10% of New York employers misclassify their workers.

This could leave thousands of employees without:

  • Proper pay for their work under the FLSA
  • Benefits, including retirement
  • Workers’ compensation or healthcare coverage

And these factors were the same major concerns that Uber drivers had.

What can we learn from the Uber strike?

Although the National Labor Relations Board determined that Uber drivers are in fact independent contractors, misclassification is a significant issue that many workers face. And they might not even be aware of it.

Misclassifying an employee is against the FLSA. And the law covers more workers than employers might think. If workers question their classification, it may be beneficial for them to verify their status to ensure they obtain the pay and benefits they deserve.