Worker classification laws have been going through a rapid evolution in tandem with the general evolution of the workplace. We thought it was high time to address some of the myths that get businesses in trouble. Read to the end for the really good news!
Worker Classification Myth #1: An Independent Contractor Must Eventually be Reclassified as an Employee.
Laws can be complicated and they do vary from state to state. Still, this perception overly complicates the issue. We think this myth likely comes from one-time best practices incorrectly interpreted as hard and fast rules. Wherever the myth comes from, we’ve seen clients build all sorts of policies to get around the supposed law. We’ve seen companies hire workers for six months, drop them for a period of time, and then rehire them, for example. Some companies even refuse to extend contracts with reliable independent contractors after working with them for a certain amount of time. They’re afraid that they’ll have to hire the worker as an employee and then provide all of the associated benefits. Not only are these policies time consuming to maintain, they can hurt businesses that rely on freelancers.
There is a fine line between an employee and an independent contractor and laws surrounding worker classification are confusing. Still, we’ve seen company policies get unnecessarily complicated—going to great lengths to comply with nonexistent rules. We think it’s time for everyone to bust the myth and bust free from self-imposed restrictions.
Here’s the liberating truth: If you find a good contractor and want to use them over and over, you can. There are rules, which vary by location, but there are also legal ways to keep your best people working for you.
Worker Classification Myth #2: It’s Not Worth Taking The Time to Understand.
Maybe this one persists not because of misinformation but simply because we already have enough to deal with and we want to believe that this one isn’t worth our time. Sort of like the 5-second rule, maybe? Both are bogus, btw.
When laws change frequently, big money is on the line, and rules are complicated, it’s tempting to ignore the issue until it shows up on your doorstep dressed in red with a pitchfork and horns.
Sorry to burst your bubble, but even if you’re not in California, this affects you. That’s not only because other states are making changes too, but also because every state has its own rules. These rules can affect everything from the price you pay on a ride-sharing app to where and how you get your haircut .
The consequences for businesses that don’t comply can be financially damaging and can also compromise consumer and employee trust.
The truth that can save your brain (along with your wallet and your reputation):
No matter where you are, you cannot afford to ignore worker classification rules, but here’s another happy truth: If you don’t want to/can’t get into the nitty-gritty details yourself, you can rely on a qualified partner (
) to do it for you. If you’re ready to offload the burden of on-boarding, payrolling, and classifying your workers and focus on what you love, reach out to our team
of experts on all things freelance.
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