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Not an employee. Not an independent contractor. What is a contributor?

April 14, 2017

By Michael Burns, courtesy of SBAM Approved Partner ASE

In his article “The Future Rise of the ‘Contributor’ – Are We Closer To Finding That Elusive Third Category of Worker?”, Richard Meneghello, Attorney at Fisher Phillips, states that a recent survey by Ranstad US finds many workers want to be called “contributors” instead of “employees” or “independent contractors.” The survey report entitled “Demystifying The Future Workforce” notes that Millennials that embrace gig working do so because the jobs provide flexible work hours, better pay and most everyone’s fantasy – being one’s own boss. 

Mr. Meneghello considers the possibility of a third category of worker that is something more than an independent contractor but less than a full employee. The “contributor” may accept a level of control by the company but would retain flexibility in their scheduled work hours and the way they accomplish the job tasks. It is defined as “any human resource supplying effort toward an organization’s business objectives and goals.”

The author considers that in our new and developing gig economy, if the contributor becomes a legally recognized classification apart from an employee and independent contractor, the contributor, may have to forego any legal recourse over misclassification as employee or that of an independent contractor. That is of course if regulators could devise laws and regulations to ensure proper classification of this “hybrid new group of workers.”

This is where the thinking on a new classification of worker still comes up short. There is already so much misunderstanding about what is a true independent contractor.  Various federal regulatory agencies as well as the Courts have devised and use different tests to determine whether a worker can be classified as an independent contractor or is really an employee.  It is difficult to imagine the world is ready for another hybrid classification to worry about. 

One has to imagine a major pinch point for the government embracing this new classification would be payroll taxes. Federal and state governments much prefer the employer collect and pay the requisite employment taxes. That is one big, but often unspoken, reason they bristle at and legally challenge so many independent contractor classifications where the worker is paid and is in turn responsible for preparing and paying their own taxes. And no doubt, the US Department of Labor and state employment standards enforcement agencies would be inundated as aggrieved “contributors” reconsidered their deal under this classification that promised freedom from traditional work paradigm, but now face a construct of new work rules and policies put upon them by business entities under pressure to show a profit. And it is highly likely that Big Labor would have a problem with this because of how difficult it would be to organize such disenfranchised workers.

But as Mr. Meneghello points out. “It’s still a dream, not close to reality, but with each passing day we find a growing push toward changing the boundaries of the workplace to accommodate the burgeoning sharing economy.”

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