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Gig Workers & Truck Drivers

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On February 19, 2021, the US Department of Labor’s (“DOL”) Wage and Hour Division (“WHD”) withdrew two Trump-era opinion letters.  The first, FLSA2019-6, discussed whether a service provider for a virtual marketplace company (“VMC”) is an independent contractor or an employee subject to the Fair Labor Standards Act (“FLSA”). The second, FLSA2019-10, involved the compensability of time truck drivers spend in a truck’s sleeper berth while they are otherwise relieved from duty.

As discussed in one of our previous posts, the Trump administration’s DOL had opined on April 29, 2019 that the VMC’s service providers were properly characterized as independent contractors rather than employees, and thus, were exempt from wage protections under the FLSA. VMCs are part of the continually expanding “gig economy,” and include familiar companies such as Uber, Lyft, Postmates, Instacart, and others. The DOL’s withdrawal of this opinion letter is consistent with its recent decision to delay the effective date of a final rule issued late in the Trump administration entitled “Independent Contractor Status Under the Fair Labor Standards Act.” As discussed in this previous post, the rule, if implemented, would make it easier for businesses to classify workers as independent contractors rather than employees. The DOL’s recent actions signal that the Biden administration plans to return to the Obama-era skepticism that gig workers are bona fide independent contractors. It’s worth noting that the DOL’s withdrawal was announced on the same day as the United Kingdom’s Supreme Court ruled unanimously against Uber in a case in which the company alleged its drivers should not be treated as employees. The UK court held that, although the company contends it is only a technology platform that connects drivers with passengers, it acts more like an employer by assigning rides, determining rates and routes, and using a rating system to discipline drivers. As a result of these recent events, VMC businesses should consult legal counsel in order to prepare for the possibility of greater hostility toward independent contractor classification.

In addition, the DOL withdrew FLSA2019-10, a July 2019 opinion letter in which the agency opined that trucking companies are not obligated to pay drivers for the time they spend in the sleeping compartment of their trucks. On February 19, 2021, the DOL rescinded this opinion letter, stating it was “inconsistent with longstanding WHD interpretations regarding the compensability of time spent in a truck’s sleeper berth” and reasoning that “[s]everal courts have declined to follow this letter” because it is inconsistent with the Department’s regulations, unpersuasive, and not entitled to deference, in part because the letter “did not adequately explain WHD’s change in position.” To the extent that FLSA2019-10 had withdrawn prior opinion letters on this issue, those letters are now reinstated. Although this decision only directly affects employers in the motor carrier space, it highlights the departure from the employer-friendly approach under the Trump administration DOL to the Biden administration DOL’s decidely employee-friendly stance.


© Copyright 2020 Squire Patton Boggs (US) LLP
National Law Review, Volume XI, Number 53

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Workers

ATO is watching gig economy workers, taxpayers paid in cash

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If you get paid in cash, the ATO is keeping a close eye on you this tax season. (Source: Getty)

If you get paid in cash, the ATO is keeping a close eye on you this tax season. (Source: Getty)

If you earn income through cold, hard cash, be warned: the Australian Taxation Office is keeping a close eye on you, a major accounting association has warned.

Gig economy workers and taxpayers who make money through the ‘cash economy’ must be careful to declare all their income this tax time, said CPA Australia senior manager of tax policy Elinor Kasapidis.

“It’s legal to receive payments in cash rather than electronically but you must report these amounts in your tax return,” she said.

“If you drive people around, do odd jobs or free-lance work, rent out your car or storage space, run social media accounts or sell products, you need to declare this income in your tax return.”

This will also include anyone who makes money from bartering or sharing, Kasapidis added.

“The ATO is aware of these ‘side hustles’ and matches data from platforms like Uber, Airbnb and AirTasker against individuals’ tax returns. This means the jig is up on the gig economy this tax time.”

CPA Australia’s warning comes after a similar warning from tax expert Adrian Raftery last month, who said nine types of taxpayers were on the ATO’s ‘hit list’ this year, including gig economy workers.

“If you advertise on the internet and customers [or] guests are paying electronically then expect the ATO to find out about it,” Raftery said.

Efforts to evade the ATO’s radar will “end in tears”, he added.

“You may think that the income is so little that the ATO won’t bother, but the cash economy is huge and is a perennial favourite on the taxman’s hit list.”

If you receive any income from these platforms, ignorance won’t be a good excuse with the taxman, said Raftery.

However, Kasapidis did note that small items, like selling some pre-loved items on eBay, won’t land you in hot water with the ATO – you just can’t claim a deduction from them.

“Don’t worry, the hundred bucks you earned from selling your designer handbag or off-loading your ‘barely used’ bike on eBay doesn’t need to be reported.”

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Can Do: Where The Gig Economy Meets Venture Capital

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Being your own boss can be rewarding, and it can be hard. Daily unpredictability confronts many of the 60 million Americans employed in the gig economy. When, where, and which job should they work on any given day of the week? How much money are they earning across multiple gigs? Information and data is sparse for workers — and not being about to count on a predictable pay rate makes it nearly impossible to plan out professional life.

It turns out there’s an app for that. Solo is a platform that supports gig workers by answering questions like: what’s the peak pay rate in your town? What jobs do you qualify for? As an independent worker, what do you need to know about taxes, insurance and benefits?

Start-up technology ventures like Solo rely on venture capital to turn their vision into a viable operating company. One such early-stage investment company is Fuse, a Seattle-based VC firm with a team of tech-savvy veterans.

Joining us today on Can Do to discuss their companies, and the meeting points of the operating world and the funding world, are: 

Bryce Bennett, CEO and co-founder of Solo. Bryce is an entrepreneur who previously held senior positions in Convoy, Inc and Uber.

Kellan Carter, founding partner at Fuse. Kellan, a University of Montana business school graduate, has spent the past decade investing in and backing founders in the software industry.

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ABN Amro builds payment service for gig economy workers

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ABN Amro has developed a tool that allows flexible workers to have their earnings paid out themselves, quickly and easily.

As the gig economy grows, there are an increasing number of flexible workers using digital platforms to find jobs on an hourly basis.

But it can take weeks after completing a shift for these gig workers to receive their pay. ABN Amro’s answer is an instant payment service that helps people decide themselves when their invoice is paid once the work is done.

This shortens the time between when the work is delivered and payment from a number of weeks to one second.

AN Amro began piloting the service in the Netherlands with babysitting platform Charly Cares late last year and is now teaming up with Packaly, an on-demand parcel delivery service. A third pilot with temporary workers will start soon.

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