The ebb and flow of Wage & Hour risk is swelling to shore, marked by an anticipated wave of court filings and political wrangling.
Now the debate will be firmly implanted within stump speeches by presidential hopefuls following Hillary Clinton’s recent remarks, which appear to be direct hits to the shared economy—or so-called “gig-economy,” she said during an economic policy address in New York City.
Clinton said the on-demand economy “is creating exciting opportunities and unleashing innovation, but it’s also raising hard questions about workplace protections and what a good job will look like in the future.
“Fair pay and fair scheduling, paid family leave and earned sick days, child care are essential to our competitiveness and growth,” she added. He comments were roundly criticized by her opponents, calling Clinton anti-business and against innovation.
Interesting how her comments come a couple days before the US Labor Department issued guidelines on independent contractors. The department’s Wage & Hour Division “continues to receive numerous complaints from workers alleging misclassification, and the Department continues to bring successful enforcement actions against employers who misclassify workers.” The department said it realizes the use of independent contractors can be beneficial for businesses, but intentional misclassification presents a major problem.
Clinton said she’d “crack down on bosses who exploit employees” by misclassifying them.
The comments were taken by many as attacks against business models such as the one used by Uber, which is now challenging a class-action in California’s highest court from drivers seeking to be considered employees, not independent contractors. The company said drivers are not a class because they don’t have enough in common.
Uber has already faced somewhat of a set back when the California Labor Commission sided with an individual seeking reclaim more than $4,000 in wages, overtime and expenses. Uber drivers are employees, the commission said.
The Wage & Hour debate is going national quickly because new innovative companies are blurring the lines on what it means to be a protected employee, which is important to many, many Americans as more rely on supplemental income to make ends meet. According to a study by independent research firm Edelman Berland, more than one in three workers—53 million Americans—are now freelancing.
Expect national policy on Wage & Hour to be shaped by this presidential election.
The government right now is “feeling like the workplace is underpaid,” Thomas Hams, national practice leader for employment practices liability at Aon Risk Solutions, recently told Advisen. He predicted that after the new Wage & Hour rules are issued, “the likelihood of litigation will increase.”
In the meantime, expect people, with the help of plaintiffs’ attorneys, to challenge the status quo often.
ALSO READ: Uber ruling resonates ahead of expected guidance on independent contractors
Chad Hemenway is Managing Editor of Advisen News. He has more than 15 years of journalist experience at a variety of online, daily, and weekly publications. He has covered P&C insurance news since 2007, and he has experience writing about all P&C lines as well as regulation and litigation. Chad won a Jesse H. Neal Award for Best Single Article in 2014 for his coverage of the insurance implications of traumatic brain injuries and Best News Coverage in 2013 for coverage of Superstorm Sandy. Contact Chad at 212.897.4824 or [email protected].
