The article mentions there are various factors used to determine if a person is an employee or
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- The article mentions there are various factors used to determine if a person is an employee or an independent contractor (IC). A major factor is the question of control. Look up and list 3+ factors also used to determine employment status. Make sure to cite your references.
- FedEx recently was ordered to pay $228 million to its California truck drivers for mislabeling them as independent contractors. Look up the case and briefly summarize it. Cite your sources.
- Based on the article, how should Uber and other "gig" jobs be classified? Are Uber drivers employees? Independent contractors? Or some other category (if you think so, what that category should be)? Explain
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THE FINANCIAL PAGE GIGS WITH BENEFITS If someone uses Uber to get to the airport, is the driver an to find customers? For companies in the so-called sharing economy-Lyft, Postmates, TaskRabbit, Instacart, and so on there may be no more important question. A couple of weeks ago, a California labor commissioner gave her answer: she ruled that an Uber driver who had filed a claim against the company was, in fact, an employee. The ruling applied only to that particular worker and the only upshot was the reimburse- ment of the plaintiff's car expenses. But, if other regulators and courts were to follow that decision, it isn't just the fu- ture of Uber that would be transformed. The U.S.job market would be, too. We hear a lot these days about the gig economy, but the issue of whether a worker is an employee or an indepen- dent contractor has been the subject of intense legal battles for decades. The dis- tinction can be surprisingly hard to make. The I.R.S. has a list of twenty factors that it takes into account, but other federal agencies have different criteria, as do most states. The fundamental issue is usually whether an employer has "control" over the work being done, but defining con- trol isn't always easy. In the past century, laws designed to protect workers have proliferated, and the social safety net has expanded significantly in wave that give employ eBay than like McDonald's: it's a platform connecting cus- tomers and drivers, and taking a cut (twenty per cent) of the transaction. It doesn't tell drivers when they have to drive, or where. It doesn't determine how many hours they work, or if they work at all. And its use of ratings isn't that different from what eBay does with its sellers. Much worker-protection legislation takes the view that, when there's a tough call like this, we should put workers' in- Uber's drivers would be better off if we declared them em- ployees. The ones who treat their gig as a full-time job-driv- ing forty hours a week or more-would probably benefit. But Uber would likely recoup its rising labor costs by taking a larger cut of fares and shrinking its workforce. Arun Sunda- rarajan, a business-school professor at N.Y.U. and an expert on the sharing economy, told me, "It's very unlikely drivers' take-home pay would rise. There also would be fewer drivers. They would be able to drive more hours, but they'd have less flexibility in how they worked." Studies suggest that flexibility-no supervisors to answer to, working when you want rather than when the boss wants is an important part of what attracts workers to companies like Uber. The real problem here is that Uber drivers don't quite fit into either of the traditional categories. Declaring them independent contractors or employees, as a California judge presiding over a lawsuit against Lyft commented, means forcing a square peg into one of two round holes. We'd do better to create a third legal category of workers, who would be subject to certain regulations, and whose employers would be responsible for some costs (like, say, reimbursement of expenses and workers' compensation) THE FINANCIAL PAGE GIGS WITH BENEFITS If someone uses Uber to get to the airport, is the driver an to find customers? For companies in the so-called sharing economy-Lyft, Postmates, TaskRabbit, Instacart, and so on there may be no more important question. A couple of weeks ago, a California labor commissioner gave her answer: she ruled that an Uber driver who had filed a claim against the company was, in fact, an employee. The ruling applied only to that particular worker and the only upshot was the reimburse- ment of the plaintiff's car expenses. But, if other regulators and courts were to follow that decision, it isn't just the fu- ture of Uber that would be transformed. The U.S.job market would be, too. We hear a lot these days about the gig economy, but the issue of whether a worker is an employee or an indepen- dent contractor has been the subject of intense legal battles for decades. The dis- tinction can be surprisingly hard to make. The I.R.S. has a list of twenty factors that it takes into account, but other federal agencies have different criteria, as do most states. The fundamental issue is usually whether an employer has "control" over the work being done, but defining con- trol isn't always easy. In the past century, laws designed to protect workers have proliferated, and the social safety net has expanded significantly in wave that give employ eBay than like McDonald's: it's a platform connecting cus- tomers and drivers, and taking a cut (twenty per cent) of the transaction. It doesn't tell drivers when they have to drive, or where. It doesn't determine how many hours they work, or if they work at all. And its use of ratings isn't that different from what eBay does with its sellers. Much worker-protection legislation takes the view that, when there's a tough call like this, we should put workers' in- Uber's drivers would be better off if we declared them em- ployees. The ones who treat their gig as a full-time job-driv- ing forty hours a week or more-would probably benefit. But Uber would likely recoup its rising labor costs by taking a larger cut of fares and shrinking its workforce. Arun Sunda- rarajan, a business-school professor at N.Y.U. and an expert on the sharing economy, told me, "It's very unlikely drivers' take-home pay would rise. There also would be fewer drivers. They would be able to drive more hours, but they'd have less flexibility in how they worked." Studies suggest that flexibility-no supervisors to answer to, working when you want rather than when the boss wants is an important part of what attracts workers to companies like Uber. The real problem here is that Uber drivers don't quite fit into either of the traditional categories. Declaring them independent contractors or employees, as a California judge presiding over a lawsuit against Lyft commented, means forcing a square peg into one of two round holes. We'd do better to create a third legal category of workers, who would be subject to certain regulations, and whose employers would be responsible for some costs (like, say, reimbursement of expenses and workers' compensation)
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Factors Determining Employment Status Beyond the crucial element of control several other factors help differentiate between an employee and an indepe... View the full answer
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