Businesses use two large categories of workers (among others) to get work done: employees and independent contractors (often known as freelancers or "gig" workers). You may have read about the Lyft and Uber controversy related to their categorization of their drivers as independent contractors. The misclassification of employees as contractors is widespread. The additional material for this week gives some history and also a fix being considered by the Biden administration. As you know from the text this week, employees enjoy many benefits and protections not always or often available to independent contractors (overtime, workers' compensation, insurance coverage, employer social security payments, etc.). Prior to the change under the Trump administration, IRS rules were reasonably specific on what constituted employment versus contractor status. The Biden proposal would return, for the most part, to the status quo prior to that change.

 

Based on the text and additional material, your research, and your experience, what are the pros and cons of using independent contractors (who actually meet the criteria)?  Why do employers, knowingly or mistakenly, often misclassify workers who meet the criteria for employees as contractors? Propose some concrete methods an employer can use to correctly classify its workers.  You can use your own workplace as an example if you can do so without sharing confidential information.  The IRS criteria / Biden proposal to enforce correct classification can be seen, I think, as a "stick" (a punishment).  Can you think of any "carrots" (rewards) the government could offer to give an incentive to employers to correctly classify workers?

Answer rating: 100% (QA)

Pros of using independent contractors 1 Flexibility Independent contractors offer businesses greater flexibility in managing their workforce They can be hired on a project basis or for a specific dura... View the full answer