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What a recent decision about Uber means for your business

Uber drivers went on strike and called for a customer boycott due to low wages and job security. You may not have seen how this could affect your business, but it has deep implications in how you hire workers.

What you might have missed was Uber drivers bringing cases to the National Labor Relations Board (NLRB). The NLRB is a federal agency that, among other things, states that workers are employees who can unionize. With unionization comes things like the ability for the employees to negotiate with company leadership.

The general counsel of the NLRB ruled that Uber drivers, and thus other similar gig workers, are not considered employees.

However, it is important to remember that what the NLRB says only matters when talking about if a worker can unionize.

As a business owner, you not only need to understand what the NLRB considers to be an employee, but also what others such as the IRS, Federal Department of Labor, and your state consider gig workers (contractors) versus employees.

The crazy thing is that these bodies do not always agree. It is possible, as an example, for the NLRB to consider your worker a contractor while the state of California considers her an employee.

California was the first state to use the ABC test to determine if a worker is an employee or contractor. This is currently the toughest test to meet in terms of having a worker labeled a contractor, so this is a good first step to ensuring you are properly labeling your workers as contractors or employees.

In the ABC test, the worker must meet all three conditions to be labeled as a contractor.

  1. Free from the control and direction of the employer with regard to the performance of the work;

  2. Outside the usual course of the hiring entity’s business; and

  3. Customarily engaged in an independently established trade, occupation, or business.

If you need more help, including a checklist, download the Independent Contractor Overview.

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