2016: Employee vs. Contractor Debate to Become Even Hotter
N.Y. Senate OKs Bill Mandating Alcohol Tests After Bad Car Crashes
New York State senators have voted to require blood-alcohol tests of all drivers following serious accidents.The employee vs. contractor debate has the potential to have a major impact on the insurance industry.It’s estimated there are 10 million independent contractors in the U.S. and that 10 percent of those people are misclassified.
That’s a huge number of people out there who are working as independent contractors but likely are misclassified,” he said, noting that federal and state governments could swoop in with new rules and regulations. “The reality is the pressure on the government is becoming that much greater.
It’s also made protections for benefits, including workers’ compensation, uneven for workers, and has created uncertain risks and exposures for insurers.
One such test was the U.S. Department of Labor’s economic realities test, which includes the consideration of the following factors:
- The extent to which the work performed is integral to the employer’s business;
- Whether the worker’s managerial skills affect his or her opportunity for loss;
- The relative investments in facilities and equipment by the worker and employer;
- The worker’s skill and initiative;
- The permanency of the worker’s relationship with the employer;
- The nature and degree of control by the employer.
A popular test for many states uses three factors:
- Is the employee free from directions and controls?
- Is the work performed outside the usual course of business?
- Is the individual customarily engaged in independently established trade, occupation, profession or business as the involved service performed?