Employee or Independent Contractor?

Council Post: The Way We Define Independent Contractor Is Broken. Here’s How To Fix It.

Woman and small business

From Forbes, Bert Miller reviews some of the effects of the pandemic on the workforce, and current laws and regulations and proposes a solution that might benefit both independent contractors and the businesses with whom they engage. Bert writes:

What would make more sense is to create new legislation where employers could hire independent contract workers for assignments that last no more than one year. After that, the company could hire an independent contractor as a full-time employee. Otherwise, the employer would have to wait 90 days before rehiring the same worker for the same assignment. Of course, the bad players might still try to work around this rule by making a few changes to the assignment for it to appear new. However, a 90-day interruption — plus substantial penalty fees for intentionally violating the rule — would quite literally give most companies pause.

A new policy should also include a deep dive into research. The problem is that at the moment we don’t have enough data on the myriad kinds of contract work in the U.S. to design new rules to best fit the needs of each subset. Throwing a blanket over an entire workforce with new benefits like mandated vacation time and childcare will undervalue some and overcompensate others.

In addition to defining the duration of contract work, let’s also extend nondiscrimination protections. Inexcusably, under current law, contract workers are not afforded the civil rights protections guaranteed to full-time employees by the Employment Non-Discrimination Act.

In March 2020, under the CARES Act, Congress expanded eligibility for unemployment benefits to include self-employed workers for the first time. Moving forward, Congress should create a “rainy day” fund that can provide independent workers with unemployment benefits in times of a national emergency.

Crises can present new opportunities. I have no doubt that 2020 will be among the most important chapters in the American history of employment. A choice shouldn’t need to be made between freedom and security when it comes to work in the 21st century. Now is the opportunity for employers and employees to come together and create new policies that reflect the reality of today’s modern-day workforce.

Read the full story at Council Post: The Way We Define Independent Contractor Is Broken. Here’s How To Fix It.

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