Edward A. Lenz, Esq., senior counsel, American Staffing Association
Brittany Sakata, Esq., general counsel, American Staffing Association
Industrial workers are increasingly being placed on job assignments through app-based job platforms and paid by the platform as 1099 workers instead of W-2 employees. Such workers cost much less because the platform provides no benefits and does not pay payroll taxes and other labor costs. This poses significant legal risks for clients, who could end up on the hook for those costs—and the workers who also may have tax liability and who are exposed to workplace hazards without workers’ compensation insurance. A new ASA issue paper, written by ASA lawyers, can be used to help educate clients on the advantages of using staffing firms that classify their workers as W-2 employees—which the overwhelming majority do—and the legal risks of using workers classified as independent contractors.
