From TechCrunch, Ken Davis discusses the possibility of a third class of worker — the dependent contractor. He raises the question of how to differentiate between legitimate small businesses (businesses with employees) and independent contractors (businesses without employees). He also offers an alternative to a new class of workers and shares his experience. He writes:
Rather than create a new class of worker, efforts should focus on enabling individual contractors to earn benefits on a prorated basis. The real crux of the problem is that for most benefits in question (e.g., health care, paid time off, etc.), there is currently no way to add these services on an hourly basis.
If benefits can be earned based on an hourly withholding, with a simple nationally standardized implementation, negative impact on the on–demand industry can be minimized and the benefits to this emerging category of contractor can be maximized.
My on–demand company works with thousands of independent lawn-care contractors across the U.S., and is comprised of half businesses-with-employees and half independent contractors. Our businesses-with-employees contractors already have general liability insurance and workers comp for their employees, but many individual contractors came to us without those protections in place.
We found a way to offer general liability and accidental occupational insurance (similar to workers comp) to independent contractors on a per-job basis, with a small withholding to pay for the benefits. This type of approach — covering benefits for the truly individual contractor with a per-job or per-hour withholding — is a way to level the playing field and give on–demand workers a way to earn benefits and protections without disrupting the emerging on–demand economy.
The worker classification for addressing these issues already exists: the 1099 independent contractor. Whether or not a new worker class is created, the eventual solution should address the issue at the heart of the matter — enabling on–demand workers to earn benefits by the hour, with a standardized hourly pro-rata withholding that all on–demand companies can implement equally….
Read the full story at A New Class Of Worker Could Fix The On-Demand Economy