NLRB charges against NYC cleaning service with worker misclassification

Dive Brief:

The National Labor Relations Board (NLRB) is charging Handy Technologies Inc., a New-York-based home cleaning service, with classifying workers as independent contractors instead of as employees entitled to federal labor-law protections, Bloomberg reports.
Handy's workers are charging the company with violating wage and hour laws and jeopardizing their rights by forcing them to settle disputes through arbitration instead of the courts. According to Bloomberg, if no settlement is reached, the case would go before an administrative law judge, could then be appealed to the NLRB and ultimately end up in federal court.
The workers' lawyer, Shannon Liss-Riordan, told Bloomberg that the suit should give employers who misclassify employees as independent contractors pause before continuing the practice, Bloomberg reports.

Dive Insight:

The National Labor Relations Act (NLRA) has a 6-point list of factors for employers to use to determine which workers are employees and which are independent contractors. Employers who follow the list can determine with some accuracy how workers should be classified according to the NLRB, but some confusion still remains. The Department of Labor and the Internal Revenue Service have their own lists of determinants.

Ride-hailing companies Uber and Lyft hired on-demand drivers who were initially classified as independent contractors but who ended up suing the companies over wage and hour issues and misclassification. Both companies had to settle.

Independent contractors and gig workers are here to stay. Employment experts predict that in 12 months — as early as 2018 — 50% of the workforce will be contingent workers. And if automation expands as fast and wide as predicted, many employees, especially those in the retail industry, could find themselves unemployed and turning to contingency work for a living.

Decades-old labor laws need updating to accommodate the massive growth in the "gig" economy. Even a bipartisan group of lawmakers agree, and convened in March to begin the process of addressing labor law gaps related to the contingent workforce — but it's unlikely we'll see any big movement on this issue soon.