“When a person fits the definition of an employee, their subsequent compensation questions are asked in what is a fairly well institutionalized and sheltered way that has been around for 100 years. However, if they fall into the independent contractor category, they are in emerging waters, ”said Matt Zender, senior vice president of employee compensation strategy for AmTrust Financial Services. “There is a lot of movement and attention in this area, largely due to the number of people entering the gig economy. The protection currently in place for an independent contractor is dramatically less than for a real employee. “
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In California, two of the biggest names in ridesharing – Uber and Lyft – recently won a lawsuit over the repeal of a state law requiring them to classify their drivers as full-time employees. It was about over $ 392 million in potential annual payroll taxes and employee compensation costs for the two ridesharing giants, including providing health and unemployment insurance to their drivers. Your objection is purely economic, but it poses an important problem for other companies that employ gig economy workers. They argue that if their drivers have to be viewed as employees, it changes their economies of scale and affects their operating model, costs, etc.
The rights of independent contractors vary from state to state, but are usually quite limited. Recognizing the relatively poor protection of workers in the gig economy, some large companies in this area have developed modified programs that at least try to provide support to independent contractors, be it in the medical field or in the event of wage losses.
“If you are an independent contractor and you injure yourself while performing a role for a larger company, you should inform and research about what has happened [about compensation]. And if you’re not happy with the answer, ask for a legal opinion on what remedy you may have, ”said Zender. “But on average the rights will be pretty low. In general, they will only be as great as the user of these gig economy workers thinks it is economically in their best interest. Most companies want their gig economy employees to work healthy, happy, and hard, and they want to be able to attract the best people. So they’re putting together a modified program that can help, but on average these programs don’t run out to be nearly as expansive as a full employee compensation plan. “
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Often there is a situation where a person has two jobs – a main job and a sideline in the gig economy. In these cases, their claims for damages will depend on the injury they have and how / when they were procured.
“Employee compensation has seen a loss from one employment position to another since the beginning of employee compensation,” Zender told Insurance Business. “It’s a little different now because you don’t talk about leaks from one job to another, but from one status to another. I think this is a little more complicated so it depends what type of injury you had. “
For example, if a person has cumulative trauma behind them, they may be able to take advantage of wage benefits from both their main job and gig work. However, if that person were injured in a collision while driving for Uber, it is unlikely that they would receive compensation from their primary employer.
“You always have to look at the facts of the injury and how it occurred. Having someone in the two buckets definitely adds elements of eligibility assessment, especially when it comes to multiple wages, “Zender said. “If you turn the script around and a person is injured in their actual job but also earns Uber wages on the side, they can use those gig wages to actually increase the wage benefits they get from their main employer. Because of their secondary employment, the weekly benefit they receive due to their injury in their actual work could be increased. This can be complicated, but it is certainly something that the individual should be pushing for. If you are an injured worker, be sure to present all of your lost earnings, including things that could fall under a gig economy job. “
The more Americans enter the gig economy, the more important the role insurance agents will play in advising and implementing those risks to insurers. History has shown that agents act as the voice for a specific area. In this case, they try to find innovative solutions that meet the needs of those who employ gig economy workers.
“Agents play a very important role,” said Zender. “The advice I would offer is, the deeper you understand your clients, the better they can communicate this to the insurance community in a way that will make them receptive and help someone who is thinking of drawing this or taking the risk, put it together. The better they understand and relate to the needs they are trying to meet, the more relaxed the underwriting community becomes when it comes to listening to them and offering solutions. ”
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