HCBA Lawyer Magazine Vol. 29, No. 5 | Page 44

GIG ECONOMY TEMPORARY STAFFING APPS Labor & Employment Law Section 23;897 =2#:638;=$;77=)=1;0=++8,<7=5+=2#:638;=$;77-='/./=*=;75:='844=)='3<4%7=*=!(:;9-=112 Employers engaging temporary workers should closely assess and proactively manage both new and traditional methods of engagement. N ew technologies with names like “tilr” and “Shiftgig” are using algorithms to match people to temporary jobs in the modern gig economy, much like ride-sharing apps connect passengers with drivers. Although the technology may be new, these applications are the modern equivalent of outside staffing companies or professional employer organizations (PEOs) that provide temporary employees under detailed staffing agreements. PEOs often are heavily regulated by a state statutory or administrative scheme. Further adding to these compliance considerations, PEOs usually are a co-employer or joint employer with their customer, and thus must comply with all employment laws. Although the use of gig employees may seem more casual or less formal, the same compliance considerations will apply if a temporary worker arrives via an app-based matching process or a traditional PEO. As gig economy temporary staffing options emerge, here are six areas of concern employers should consider and, where appropriate, resolve in advance of hiring or using gig employees. 1. Employee versus independent contractor? This question often looms. If the proper classification is employee, the employer has many obligations. Even if both parties agree to the characterization, it may not be legally valid under federal and state law, so the employer must evaluate each employee’s role on a case-by- case basis. 2. Withholding If a worker is an employee, the employer must withhold federal, state, and local taxes; Federal Insurance Contributions Act (FICA) taxes; Federal Unemployment Tax Act (FUTA)/state unemployment tax acts (SUTA) taxes; and more. To avoid non-payment of taxes, which may result in both companies receiving notice from the IRS, the issue of which company must withhold taxes when an algorithmic application assigns a worker to a project must be evaluated in advance. 3. Workers’ compensation Most states have strict rules requiring workers’ compensation coverage. Some app-based temporary staffing models suggest that workers’ compensation coverage is provided. Employers should verify coverage, regardless of the staffing source used. If the hiring employer provides workers’ compensation benefits, this is an admission of employee status, and the worker should be classified as such. 4. Administrative Agencies Some states and localities have special requirements and notice obligations with respect to temporary employees. The Fair Labor Standards Act and some state laws require employers to record time worked for temporary employees. Employers must also record covered injuries for temporary employees on an OSHA log. Continued on page 43 ARE YOU RECEIVING HCBA’S EMAILS? HCBA regularly communicates with members via email. Stay in the know by making sure your email is up-to-date in your member profile at hillsbar.com. 7 2 <: = - = 3 / , ; = 7 9 8 6 *==45+<=.<0:;1