The Labor Department weighed in last week on a question whose answer could be worth billions of dollars to gig-economy companies: service providers for a virtual marketplace company are independent contractors (or freelancers, on-demand and gig workers).
To make this determination, the DoL's Wage and Hour Division (WHD) applied its longstanding and unchanged six-factor balancing test, derived from Supreme Court precedent:
- The nature and degree of the potential employer's control;
- The permanency of the worker's relationship with the potential employer;
- The amount of worker's investment in facilities, equipment, or helpers;
- The worker's opportunities for profit or loss;
- The amount of skill, initiative, judgement, or foresight required for services;
- The extent of integration of the worker's services into employer's business.
Though the announcement took the form of an "opinion letter," other businesses in the industry tend to parse such letters closely for insight into the DOL's approach. You can read the opinion letter in its entirety here(https://www.dol.gov/newsroom/releases/whd/whd20190429).
Any business that is engaging an independent workforce needs to take steps to ensure they remain compliant with federal, state and local laws and regulations. Those that don’t risk being subjected to lawsuits, government audits, and tax liability/penalties.
WorkMarket is the industry leader in helping companies that engage an independent workforce manage their compliance risk. Our tools allow each of our customers to “Set It and Forget It” and help ensure their teams don’t individually engage labor inappropriately. Set up your WorkMarket environment to limit who you engage and how you engage them. All systems and engagement points can be delivered with a few clicks into an Audit Trail to address the compliance needs your company may have.
WorkMarket Labor Clouds allow you — whether you’re in Legal, the Business Unit, HR, or Procurement — to set the rules for WHO you engage with. If your company believes risk is mitigated by only engaging independent contractors with certain characteristics, our software lets you establish those parameters which can include:
With our “Set It and Forget It” feature, you only have to define your engagement criteria once. If someone’s insurance expires or a certification becomes out of date, our software will automatically remove that individual from your Talent Pool. This ensures that anyone who is sent work through that Talent Pool is fully compliant with your requirements.
Labor Clouds management is just one of the several ways WorkMarket can help you manage your compliance risk
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