Like California, Massachusetts has sued Uber and Lyft to force the ride-hailing companies to classify drivers as employees (as opposed to independent contractors).
“Uber and Lyft have built their billion-dollar businesses while denying their drivers basic employee protections and benefits for years,” said Massachusetts Attorney General Maura Healey in a statement. “This business model is unfair and exploitative. We are seeking this determination from the court because these drivers have a right to be treated fairly.”
As I have previously written, on the surface, it looks like the states are trying to do right by workers. The proposed regulations seek to gain “basic protections,” such as minimum wages and unemployment and disability insurance coverage, but these two lawsuits don’t do any carve-outs for other kinds of gig workers.
There will be significant ramifications for incorporated workers who will be caught between two worlds. So far, I have not seen any provisions for waivers. If you are an incorporated contract worker (engineer, consultant, or freelancer of any kind), you already carry worker’s comp and disability insurance for yourself, and you already have other business insurance policies required to be a contract worker. If the state requires you to be treated as an employee, you will either lose control of your P&L and your tax returns, or you will be doubly taxed and doubly insured. Your deductible expenses would become reimbursable expenses (if allowed by your employer), etc. This is a hot mess, and it is super counter-productive for both contract workers and the businesses they serve.
There is absolutely a place for this kind of regulation at the low end of the pay scale, where unskilled workers do contract work and unscrupulous business owners try to save a few bucks by keeping the workers off the books. Without a specific carve-out for skilled incorporated contract workers, though, this is a direct attack on the gig economy, and it will be a crushing blow to skilled freelance workers.
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Author’s note: This is not a sponsored post. I am the author of this article and it expresses my own opinions. I am not, nor is my company, receiving compensation for it.