Independent Contractors Have No Workers Comp Benefits in the Sharing Economy

In recent months, numerous independent contractors working for all kinds of businesses – from Google coders to exotic dancers to sharing economy employees – have filed lawsuits claiming that their employers are in violation of the Fair Labor Standards Act. Many companies have been accused of violating fair wage laws by hiring employees as independent contractors so that the companies pay less for employment taxes and health benefits. But independent contractors also do not receive necessary benefits, like paid sick leave and workers comp.

For example, Uber drivers put themselves at great risk. While taxi companies face strict regulations and must pay workers comp to injured drivers, Uber has long claimed that it is a mobile app company that links drivers – who use their personal vehicles rather than work-specific vehicles – to “fares,” or people that need rides. The company faces numerous lawsuits from individuals claiming serious personal injury or wrongful death at the hands of a distracted Uber driver, but Uber drivers themselves are at the mercy of their fares. One unfortunate driver in Los Angeles named Omar, for example, picked up a revelers around 2 AM in December, but when he dropped them off at their destination, two passengers refused to exit his vehicle, and one hit him with “a shiny object” which broke his jaw in two places. He was hospitalized for a week.

An article from Forbes details more assaults against Uber, Lyft, and Sidecar drivers, who are all independent contractors and therefore do not qualify for workers comp insurance: “On Sunday, an off-duty Boston cop assaulted his Uber driver, yelled racial slurs at him and stole his car. In Los Angeles, people stabbed an Uber driver in the face and neck in November and choked another driver on New Year’s Day, though in both cases the attacker was likely not the passenger Uber assigned the driver. A San Francisco passenger attacked his Uber driver in November, landing him in the hospital with facial injuries. A Lyft passenger punched his driver and broke his nose in May.”

Omar, like many independent contractors who suddenly face steep medical bills due directly to their employment, believes that Uber should help pay some of his costs, either through workers comp or directly. But a spokeswoman for Lyft summed up the problem: “The nature of Lyft’s relationship with drivers is very different than the typical employee relationship in which an employer would provide workers’ comp insurance.”

Some workers comp advocates and specialists, however, argue that the sharing economy is missing an opportunity to use existing laws, such as workers comp laws, to protect their industry when employees are injured on the job.

“There are parts of workers’ compensation that these companies could take on,” said Denise Cheng, an MIT affiliate researcher whose thesis focuses on labor in the sharing economy. “Worker misclassification is going to become weaker and weaker … It doesn’t make sense to hinge everything on that. What we should think through is, ‘What should the protections be for an independent contractor?’”

The Strom Law Firm Can Help with Workers Compensation Claims in South Carolina

Any full-time employee (working for an employer with four or more employees) who has an employment related injury and needs medical attention should be covered under workers’ compensation insurance. It doesn’t matter if the injury was a complete accident or the fault of a co-worker.

The South Carolina workers compensation lawyers at The Strom Law Firm, LLC proudly seek justice on behalf of employees injured or killed on the job who work for private companies, as well as employees working for county, city, and state government. We are licensed to practice throughout South Carolina, as well as Georgia and New York. If you have been injured on the job, give us a call. We offer a free consultation to discuss the facts of your case. 803.252.4800.