On Friday, I used the phrase “Uber Settlement” as (maybe) click-bait to introduce an important, but hidden, issue facing Irish and Northern Irish companies operating in the US. As I noted in that post, many Irish and Northern Irish companies use a variety of ‘independent contractors,’ especially in the early stages of operating here—consultants and the like who are not intended to be employees. The risks associated with just labeling someone as an independent contractor can be significant, and very expensive. I’ve seen many Irish and Northern Irish companies make the same mistake—assuming that because the relevant contract states that someone is an independent contractor, such person is, in fact, an independent contractor and not an employee. Based on my experience, Irish and Northern Irish companies: Continue reading
Uber recently settled—for US$100 million—two class-action cases involving some of its drivers, and one of the issue points in the litigation was whether Uber drivers are independent contractors or employees under relevant US law. The contractor/employee distinction is a huge issue in the US, and it has flow-through effects on tax withholding, health insurance, employee rights, collective bargaining, employee eligibility for employment under US immigration laws, etc. It is one area where the US Department of Labor is focusing its compliance efforts. In the Uber case, the distinction was important because if an Uber driver were an employee, he or she could be entitled to minimum wage, certain benefits, and Uber’s ‘no tip’ and termination policies might be inapplicable. Those concerns do not exist for independent contractors, both generally and in the Uber case.
So, what does this mean for Irish and Northern Irish companies operating in the US? Bottom line: Be sure you’re correctly identifying someone as an employee or as an independent contractor. Continue reading