With the rise of the “gig economy,” which now encompasses more than 16.5 million Americans throughout California and across the country, many questions have been raised about the way in which workers are designated as independent contractors. Higher education has always relied significantly on contracted workers, such as adjunct professors who often teach full-time schedules but receive limited compensation, benefits or job security.
Now, a number of online education companies also rely on this independent contractor system to make up their workforce. However, the determination of who is and isn’t actually a contractor is a matter of law; a company cannot simply treat a worker as an employee while labeling him or her a contractor for the purpose of benefits and taxes. One class-action lawsuit case that was recently settled was filed by two former instructors against General Assembly, an education company based in New York. Because they were classified as contractors, they did not receive overtime pay or paid breaks as required under state law.
The education company is not alone; many gig economy companies like Uber have been challenged for their practices of labeling workers as contractors while imposing employee-like regulations and oversight. In California, the state Supreme Court ruled that companies have to pass a three-part test in order to classify workers properly as contractors. For example, the company must show that a contractor’s job is outside the normal scope of business of the company.
In the education industry, around 8 percent of all workers are classified as independent contractors. Sometimes, people’s work may truly be independent, but on other occasions, companies misclassify workers to avoid labor laws. An employment lawyer can help a worker who has been denied overtime or not paid for all of their hours worked due to an incorrect independent contractor classification.