If your industry or business engages independent contractors, the short answer is yes! Your industry will be affected by last week’s ruling (which tightens worker classification standards). The misclassification of employees (i.e. labeling them as independent contractors instead of employees) has been a significant issue for years and has only continued to heat up as more business models rely on independent contractors. Last week, the issue reached a breaking point with the federal decision that will make classifying workers as independent contractors harder to justify legally.
While any company that engages independent contractors can be a target of the ruling, industries that rely heavily on independent contractors are especially likely to end up making headlines for misdeeds in the coming years.
10 Industries That Are Frequently Cited For Misclassification
Industries likely to face huge changes include the following because they frequently use subcontractors. Some also have a historical gray area between the work independent contractors do and their employee counterparts or have a reputation for knowingly misclassifying workers to circumvent labor laws and benefit costs. They may also classify workers as independent contractors even though the work they perform is core to the business function (one of the 6 factors of the decision’s economic reality test).
- Creative Production
- Delivery Services
- Experiential and Event Production
- Gig Economy Companies
- Information Technology
- Any business that engages independent contractors
The Bottom Line
Any company that engages independent contractors should be sure to examine internal worker classification practices ahead of March. Any preventative measures before the ruling goes into effect will pay off in peace of mind (at a minimum) and could even prevent companies from incurring fines and other headaches. Reach out to the pros (👋 ) if your company could use a little help making sure your ducks are in a row ahead of the change.