The last two months have consumed all of us with matters related to COVID-19. This public health emergency has created an anomalous situation virtually no one could have foreseen: legislation being passed at the federal level that treats independent contractors in a similar fashion to employees for purposes of unemployment benefits and paid sick and family leave benefits. Since the inception of this blog almost ten years ago, we have reported on over a dozen bills introduced in Congress addressing independent contractors – and not a single one was seriously considered due to a lack of bipartisanship on Capitol Hill. Yet, in a legislative effort almost as swift as the spread of the Coronavirus itself, two key pieces of federal legislation were passed by Congress and signed into law by the President in the course of only nine days that provided pandemic benefits not only to employees but also to self-employed individuals including gig workers and freelancers.…

Federal and state laws have historically barred independent contractors and other non-employees from unemployment insurance benefits—until the COVID-19 crisis descended on the U.S. workforce. This pandemic, almost overnight, suspended almost all work opportunities for those who have operated as self-employed individuals and received a Form 1099 for their compensation, except for individuals whose work can be performed remotely or who provide an essential service.…

Self-employed individuals are now covered for pandemic unemployment assistance under the CARES Act, as we discussed in our blog post of March 26, 2020. Many independent contractors whose work has ceased or lessened substantially during the Coronavirus pandemic have started to file claims for unemployment compensation and are filing as if they are employees. This is because the state Unemployment offices have not yet updated their claim forms to add a box for “self-employed individuals” or have chosen not to consider claims by such ICs until their claims as employees have been denied.  That is now creating a heightened risk for businesses.  Nevertheless, there is a way for companies to protect themselves while still assisting ICs to receive desperately needed “unemployment” benefits available to them under the CARES Act.…

The New York Court of Appeals today issued a decision involving the independent contractor status of a Postmates courier.  The Court’s opinion supporting employee status may have very little impact from a judicial standpoint in New York and, indeed, may provide useful insights for savvy companies seeking to elevate their level of independent contractor compliance.  But it may also send shockwaves through the gig economy in New York and elsewhere for those who read more into the decision than is warranted.…

The Senate passed last night an 883-page Coronavirus stimulus bill, which is expected to be passed by the House and signed into law by the end of this week.  It contains unemployment assistance provisions that expand coverage to individuals not ordinarily covered by unemployment insurance laws:  self-employed individuals, also known as independent contractors, freelancers, sole proprietors, or gig workers.  Under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, such individuals will be entitled to “pandemic unemployment assistance” if they are able and willing to work or telework for pay, but are unable to do so due to a broad range of reasons related to the COVID-19 pandemic.  In addition, Congress recently passed and the President signed into law the Families First Coronavirus Response Act, which also covered independent contractors, providing for paid sick and paid family leave to self-employed individuals.…

This post was inadvertently republished on March 18, 2020.  It was originally posted on December 17, 2019, found at this link.…

This past month was the first month we can recall where there were no legal developments of note involving class action independent contractor misclassification lawsuits, which have become increasingly prevalent.  Instead, the two top cases reported below are decisions by federal appellate courts in single plaintiff IC misclassification lawsuits: one where the U.S. Court of Appeals for the Third Circuit concluded that sales marketers for roofing companies had been misclassified under a Pennsylvania wage payment law, and the other where the Fifth Circuit held that a highly paid legal consultant seeking overtime pay under the federal wage and hour law had been properly classified as an IC.…

Many companies that operate their businesses on an independent contractor model or supplement their workforce with ICs may be wondering if they will be impacted by the U.S. Department of Labor’s final rule on joint employer status, which was informally released today.  They are likely asking, “Does this final rule have any bearing on independent contractors?”  The answer is yes.…