Dive Brief:

• On-demand commerce and services is raising new questions in the legal/HR arena.

• Employers have long faced difficulties classifying workers as independent contractors in more traditional industries.

• Lawsuits challenging the classification under the Fair Labor Standards Act and state law are common, with plaintiffs seeking significant back wages and liquidated damages.

Dive Insight:

The emerging on-demand economy appears to be the newest front of wage and hour lawsuits targeting nontraditional and independent employment arrangements. A recent article on Workforce.com notes employers must evaluate the tasks workers are performing, the permanency of the relationships, and the level of control the business will have over these individuals, among other factors. It states that legal departments or counsel of established corporations should similarly evaluate such employment arrangements before rolling out any on-demand services. Failure to do so could be the recipe for a lawsuit, and with litigation comes potential liability for minimum wage, overtime and a myriad of other legal obligations.