Gig Economy And Georgia Workers’ Compensation Laws
The “gig economy” is a term for the transition from typical employer-employee relationships to business-to-contractor relationships. While more and more folks are entering the gig economy as a way to earn extra money, more still are relying on contractor labor to provide for themselves and their families.
As for employers, they benefit in several ways by hiring contractors as opposed to employees. Employers owe a duty of care to employees and must afford them overtime, paid leave, and civil rights entitlements. With so much legal overhead regulating the relationships between employers and employees, it’s often easier and cheaper to hire contractors for gig work.
Gig workers and workers’ compensation
Right now, Georgia does not have any laws that require a business to purchase workers’ compensation insurance for gig workers. Contractors generally work for themselves and are thus considered both employer and employee. Therefore, they’d have to provide their own insurance, generally in the form of long or short-term disability coverage. However, not all those who are labeled as independent contractors actually qualify under the state’s definition. In fact, companies can save a lot of money by misclassifying employees as contractors and do, on various occasions, try to stretch the law.
Independent contractors, on the other hand, are entitled to file lawsuits against companies for whom they did work for. They must be able to prove that the company was negligent but are entitled to recover pain and suffering damages, which would not be allowed under workers’ compensation.
Definition of independent contractor
To get rid of the gray area, the law has a test for determining whether or not an individual qualifies as an employee or an independent contractor. Companies themselves cannot make up a rule. Factors that the court will weigh when determining if an employee is a contractor include:
- Are you paid hourly or by the job?
- Do you provide your own materials and tools?
- Do you dictate how and when a job will be done?
- Does your employer dictate how long you work?
- Is the income your only source of income?
The judge will ask questions like those to determine whether or not an employer-employee relationship exists. If it does, then the employer must provide workers’ compensation insurance to their employees. If not, then you’re a contractor who is not entitled to workers’ comp.
Uber: A case study
Uber designed its entirely platform to be contractor-driven, but that hasn’t stopped states like California from classifying them as employees. This is largely because Uber became one of the largest employers in the state and owed no duty of care to their drivers. To be sure, drivers are allowed to show up when they please, work as long as they like, use their own materials, and are paid by the job. Nonetheless, some drivers earn their entire income from Uber. But it took a legislative effort to reclassify Uber. Under the law, the drivers fit the definition of a contractor much better than an employee.
Talk to a Decatur, GA Workers’ Compensation Attorney
O’Connell Law provides representation for injured workers in workers’ compensation claims. Call our Decatur workers’ compensation lawyers today to schedule a free consultation and learn more about how we can help recover your benefits.