Gig Workers: You Might Really be Employees

Employers try to misclassify gig workers as independent contractors to avoid compliance with wage and overtime laws. However, all across the country, gig workers are being protected more and more by courts and state laws. This is good news. For years, employers have been illegally misclassifying gig workers as independent contractors to avoid paying minimum wage, overtime and providing other benefits and rights that are owed to employees. Gig workers, for example, cannot claim unemployment if they stop receiving work assignments or receive workers compensation benefits if they are injured on the job. If you are a gig worker, consult experienced and proven employee rights attorneys like the ones at Herrmann Law. Your employer may be significantly underpaying you and violating the full panoply of rights guaranteed to you by state and federal labor laws by misclassifying you as an “independent contractor” when in reality you are legally an “employee.”

Gig Workers Misclassified as Independent Contractors

A recent decision from a federal court in Massachusetts demonstrates the point. See Hogan v. The InStore Group, LLC., Civil Action No. 17-10027 (US Dist. Mass. January 11, 2021).

The case was brought by Paradise Hogan who worked as a “vendor associate” for a company called InStore Group, LLC (“InStore”). InStore provides contractual services to retail stores and manufacturers for tasks like counting and correcting inventory, product order entries, product demonstrations, building and assembling store displays and placing racks. InStore provides labor for these tasks through gig workers called “vendor associates.” InStore classifies its vendor associates as independent contractors and pays them as such.

When InStore has a contract to fulfill with a retail store or manufacturer, it advertises the work to its vendor associates who have registered on its internal website. Vendor associates can select the projects that they want and can select as many or as few as they want. Vendor associates must perform the jobs during certain time frames with some jobs having to be done on certain dates and/or at certain times and/or within certain lengths of time. The vendor associate completes the project at the client’s location. To be paid, a vendor associate logs on to InStore internal website, checks a box indicating a project is complete (along with a photo) and submits an invoice for payment. In Hogan’s case, he was paid $12 an hour for the projects he worked on.

This type of arrangement is probably familiar to gig workers. But this type of arrangement is likely a violation of your rights as an employee. Hogan thought so and sued in Massachusetts federal court alleging that he was not an independent contractor. Fortunately for him and other vendor associates, the federal judge agreed with him.

The judge applied Massachusetts law and Massachusetts used a legal test called the ABC test. In Massachusetts, workers MUST be classified as an employee unless all three (3) parts of the ABC test are satisfied. These are:

• The individual is free from control and direction in connection with the performance of the service, both under his contract for the performance of service and in fact; and
• The service is performed outside the usual course of the business of the employer; and,
• The individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed

As should be clear from the facts listed above, InStore failed this test. While facts related to the first prong of the test were debatable, the second two were not. Hogan’s work was part of the “usual course of the business” for InStore. Further, the work done by Hogan was not in an “independently established trade.” InStore failed two prongs of the ABC test and, as such, Hogan should have been classified as an “employee.”

The case will move forward with Hogan having an opportunity to prove his damages. Those could be substantial for Hogan. As an example, in a related case before the same judge, a fellow vendor associate estimated her lost wages and benefits under Massachusetts law were greater than $25,000. She calculated her lost wages to be about $4,700 and lost reimbursements to be about $3,600. Under Massachusetts labor statutes, workers who prove violation of their rights are entitled to mandatory treble damages. See Cherelli v. The InStore Group, LLC., Civil Action No. 18-10717 (US Dist. Mass. January 11, 2021).

As these cases demonstrate, being misclassified by your employer could be costing you a lot of money.

Call the Employee Rights Attorneys at Herrmann Law Today

For more information, call the Employee Rights attorneys at Herrmann Law. If you think that your employer has been misclassifying you or has engaged in other violations of your rights as an employee, call us. We are proven, experienced, employee-focused attorneys representing workers across the United States in all types of workplace disputes. Use our Online Contact page or call us at (817) 479-9229.