How Can We Fix Worker Classification?
The most common proposal to fix the worker classification system is to add a third category of workers called “independent worker,” or “dependent contractor.” The new category of worker would get more benefits than an independent contractor, but fewer than those offered to traditional employees. This option would create a more complex three-tier workforce. It would also introduce an additional kink into the labor market and continue to distort the behavior of both companies and workers. Unless the new category is defined with a clear test and objective criteria, the problem of having vague, subjective, and conflicting definitions of each type of worker will persist.
Another option is to eliminate the artificial distinction between employee and independent contractor entirely, leaving a single category of worker. Under this system, our labor market would support everyone who works, employers would pay taxes and benefits for their entire workforce, and it would extend to all workersthe subsidies, benefits and labor protections now offered only to employees.
Reforming employee classification is a massive undertaking, but one that is necessary to create a more economically efficient labor market and eliminate the inequity and ambiguity of our existing two-tier system. The growth of independent work in the Gig Economy is fundamentally changing how we work. We need a classification system and labor market that reflects and supports those changes.
Read the full story at How Can We Stop Companies From Misclassifying Employees As Independent Contractors?