KingSpry | NLRB Bolsters “Gig Economy” in 2019

NLRB Bolsters the “Gig Economy” in 2019

Posted on January 31st, 2019
by Keely J. Collins

The economic atmosphere of an increasingly project based and entrepreneurial workforce largely depends on agency support to loosen the grip of employment law.  To that end, 2019 has started off with a bang for businesses leveraging the gig economy.

On January 25, 2019, in the SuperShuttle DFW, Inc. case, the National Labor Relations Board (NLRB) announced its return to a traditional common-law test used to classify workers as employees or independent contractors. The SuperShuttle case clarified the role entrepreneurial opportunity in determining a worker’s independent contractor status.

More specifically, this case involved shuttle driver franchisees of SuperShuttle at Dallas-Fort Worth Airport. The NLRB, applying control factors, found that the franchisees had significant entrepreneurial opportunity for economic gain. Ultimately, the NLRB held that the franchisees where not employees under the National Labor Relations Act (NLRA), a law that gives employees certain rights to organize and collectively bargain.

The NLRB’s decision overturned a prior decision in FedEx Home Delivery, a 2014 NLRB decision that severely limited the significance of entrepreneurial opportunity in classifying workers as independent contractors.

What does this mean for you, as a business owner?

The SuperShuttle case will go a long way toward defending against independent contractors’ efforts to unionize or take other collective actions that are permitted under the NLRA.  Additionally, this decision could impact the standards used by other federal agencies. The intendent contractor classifications of the NLRB have, in some instances, informed the decisions of other federal agencies, including the IRS and the Department of Labor.   We will not, however, know these agencies’ views of the SuperShuttle standard or the role of entrepreneurial opportunity until they release their own decisions.

Here are three tips for businesses in the gig economy.

  • Classify only truly independent workers as independent contractors. Under SuperShuttle, the NLRB will be looking at entrepreneurial opportunity as one factor in the independent contractor relationship. Likewise, businesses should also be evaluating the opportunities available to workers as one factor in the relationship status.
  • Clarify the law that applies to your specific issue. Although the NLRB may inform the decisions of other agencies, be advised that the independent contractor standard varies by agency and law. The same standard applied by the NLRB would not necessarily apply, for example, to an employee pay or employment tax issue.
  • Remember the political tides could turn! Just like we saw a tightening of the joint employer standard under the Obama administration and now a broadening of the independent contractor standard under the Trump administration, we may have an entirely new test in the future

Stay tuned…

 

The Eastern Pennsylvania Employment Log (EPELog) is a publication of the KingSpry Employment Law Practice GroupJeffrey T. Tucker, Esquire, is our editor-in-chief. EPELog is meant to be informational and does not constitute legal advice.