Classifying Independent Contractors

I've been thinking a lot about the role of human resources as it pertains to the gig economy and independent contractors (ICs).

In previous roles, ICs were hired and managed by the department who needed the extra hands, sometimes without telling HR about the new hire until after the contract was signed. I thought that although putting the responsibility in the hands of managers meant less work for HR in the present sense, it could end up being more of a burden to HR in the long run if there were issues with the hire such as misclassification under the IRS guidelines for determining what makes a worker an IC or employee.

In October 2022, the Department of Labor (DOL) proposed an update to the rules for classifying ICs. Under the new rule, those working in the gig economy would be newly labeled as an employee, thus gaining employment rights but losing flexibility in their work. Even if this rule does not pass, it still continues the conversation of what impact ICs may have on a company's culture. Even if these workers are not employees, they still become part of the team for however long the project lasts and even longer if they decide to stay for more projects. Plus some workers in the gig economy make up a significant amount of all workers for companies such as Uber and Lyft. This article talks more about that here: https://lnkd.in/gxrkuEWF

In saying this, I hope that the industry leaders in human resources are discussing how the people department will hire and manage ICs; as more and more folks are venturing into working for themselves and gaining work through contracting. With so many employment laws to navigate through, I see HR playing a bigger role in managing this contingent workforce.