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Workers’ Compensation and the Gig Economy

April 02, 2018

Employment opportunities for freelance workers have been booming lately. Known as the gig economy, employers commonly have temporary positions and contracts with independent workers for short-term and part-time jobs. Popular app-driven businesses such as Lyft, Uber, Doordash, and Grubhub are all part of the gig economy.

Most employers are required to obtain Workers’ Compensation insurance to cover workers who experience on the job illnesses or injuries. It is a no-fault insurance program that provides compensation to workers for medical expenses and lost wages. In this program, workers do not have to prove negligence on the part of the employer, but they are not entitled to sue for further damages. It has been in existence for over a hundred years and has provided needed benefits for many workers.

Independent Contractors

According to the National Employment Law Project (NELP), 129 million workers in the United States are covered by Workers’ Compensation insurance. However, many workers in the gig economy are considered independent contractors who are not entitled to the same wages and benefits as employees. An estimate by McKinsey Global Institute found that between 54 and 68 million independent contractors do not receive benefits. Many part-time workers are made to sign employment agreements that release their employers from having to provide benefits, including Workers’ Compensation. Nearly all independent contractors are exempt from Workers’ Compensation and other benefits.

According to a recent report by the Bureau of Labor Statistics, transportation incidents account for almost half of on-the-job fatalities across all industries. NELP had also found that taxi drivers and chauffeurs suffer fatal injuries five times more often than other workers. Recently, a 19-year-old bicycle delivery worker for Doordash was struck and fatally injured while making a delivery. His family had not received any compensation since he was exempt from Workers’ Compensation.

Worker advocates and lawmakers are trying to protect independent contractors and others who lack protection. In New York and Washington, legislation is being proposed to impose a fee on gig economy transactions and will be used to create a fund to provide portable benefits for workers. However, protection does exist for workers who are placed into positions by a temporary agency. In this case, there is shared responsibility for the employee’s safety by both the agency and their work site employer.

Cherry Hill Workers’ Compensation Lawyers at DiTomaso Law Represent Injured Workers

If you have experienced a workplace illness or injury, our Cherry Hill Workers’ Compensation lawyers at DiTomaso Law can investigate your employer’s liability and help you pursue compensation you may be due. Fill out our online form or call us today at 856-414-0010 to schedule a free initial consultation. Our office is in Cherry Hill, New Jersey, and we serve clients from throughout the surrounding areas.

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