Independent Contractor Misclassification and Compliance News April 2023

By Nathan Gibson | April 28, 2023


Key Points

Seattle expands their paid time off ordinance which extends benefits to all app-based workers.

Louisiana home healthcare provider misclassified workers.

The DOL recovered $265K for misclassified drywall contractor employees.

As the independent workforce continues to grow, so do the issues of worker compliance and misclassification. It is important for enterprises to remain informed about the latest laws, regulations, and developments surrounding these topics. Each month, we’ll bring you the latest news stories from around the web.

1. Seattle Ordinance Expands Paid Time Off for App-Based Workers Including Independent Contractors

In 2020, Seattle passed the Paid Sick and Safe Time Ordinance for Gig Workers. This ordinance established paid sick time and paid time off for food delivery network company workers. The ordinance said that app-based workers were able to accrue paid leave as an emergency provision during the pandemic. The Paid Sick and Safe Time Ordinance was set to expire on April 30, 2023.

Seattle recently passed the App-Based Worker Paid Sick and Safe Time Ordinance which extended the benefits for food delivery network company workers and expanded coverage to all app-based workers. The ordinance says that it:

“Protects and promotes public health, safety, and welfare by requiring network companies to provide app-based workers working in Seattle with paid sick and paid safe time, which will: alleviate the economic pressures that compel app-based workers to work when conditions are not safe; reduce the risk of app-based workers working while sick and spreading illness; increase opportunities for app-based workers to stay home and take care of themselves and family members during periods of illness and other health or safety risks; and promote a healthier and more productive workforce with enhanced public health outcomes for app-based workers, their families, network companies, and the community as a whole.”

The App-Based Worker Paid Sick and Safe Time Ordinance applies to companies with 250 or more app-based workers worldwide. Companies such as Uber and Lyft are already covered by Washington’s paid sick leave provisions.

The ordinance is effective on May 1, 2023 for food delivery companies—extending the benefits set up during the pandemic. Paid time off benefits will be available to other app-based workers starting in January 2024. Seattle continues to be a leader in providing protections and benefits to non-employee gig workers.

2. DOL Found that a Louisiana Home Healthcare Provider Misclassified Workers

The United States Department of Labor (DOL) found that a Louisiana home healthcare provider misclassified workers and recovered $158k in back pay and liquidated damages for them. The DOL has recently focused on healthcare workers to ensure that employers are complying with the Fair Labor Standards Act (FLSA) for healthcare workers.

The DOL’s Wage and Hour Division found Amazing Grace PCA, a home health care provider in Louisiana, misclassified 77 workers as independent contractors which denied them of overtime wages. Amazing Grace PCA also failed to pay one worker for all hours worked that led to violation of the Fair Labor Standards Act’s minimum wage provisions.

3. DOL Recovers $265K for Misclassified Employees of Drywall Contractor

The DOL announced that it had obtained a judgment against a drywall contractor for back wages and liquidated damages to workers due to the drywall contractor’s various violations including misclassifying workers as independent contractors. The DOL has focused on the construction industry to ensure that construction workers are paid and treated in compliance with the Fair Labor Standards Act (FLSA).

Under terms of a settlement, the drywall contractor will pay $132,500 in back wages and an equal amount in liquidated damages to 182 workers. The contractor had misclassified workers as independent contractors and concealed the true amount of overtime due by labeling it “reimbursements”.

The construction industry is known for misclassifying workers as independent contractors. With the DOL’s focus on the construction industry, contractors would be well advised to properly classify their workers as employees or independent contractors.

For more information, check out our resources page on misclassification and compliance. If you have any questions about engagement, classification, or management of your independent workforce, we’re always here to help. 

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