Employee or Independent Contractor? New Ruling Makes Sweeping Changes

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By Linsey Knerl
From NAV

There was a time, not long ago, when businesses in every industry grew with the labor and talent of workers classified as independent contractors.

Even before the “gig economy” and “side hustles” were buzzed about (and companies like Lyft and Uber made them newsworthy) small businesses everywhere relied heavily on contract workers provide the bulk of their services. Hairdressers, construction workers, writers, and dog walkers were all classified as independent contractors with little to no challenge to their status, but all of that is changing.

A recent California Supreme Court ruling, along with a handful of state and local ordinances have made some strict interpretation of who can—and who can’t—be called a contractor. Washington state has even produced a "step by step guide" for businesses to classify and hire their workers with the appropriate classification. While the exact rules differ slightly from region to region, there is a common thread between them: fewer workers are now legally able to be paid as independent contractors...

If there is any takeaway here, it’s that everything we know about hiring independent contractors is changing. If you only hire a few 1099 workers to do jobs completely unrelated to your business (hiring a cleaning service to sweep up your barbershop, for example), you’ll probably be OK.

If you rely heavily on a team of skilled professionals who carry out the same services your business markets and sells (a team of writers for your publishing company), be ready for some of these changes to come to a neighborhood near you.

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