In the current gig-economy, some companies have constructed huge enterprises based on business models that classify their entire workforce as independent contractors. By classifying their workers as independent contractors rather than employees, these companies shift their costs onto the workers and communities they serve.
Traditionally, companies paid payroll taxes on employees. And, companies provided benefits (such as workers’ compensation) for employees. Neither is true with independent contractors. The costs and taxes are shifted to the worker. Work-related injury and disability costs are shifted first to the worker. But, when the worker is unable to pay, these costs are borne by the entire community. In past years, I’ve written several articles discussing why basic workers compensation benefits are important to our entire community.
Employee classification matters for several reasons. Today, I’ll stick to a topic I frequently discuss — Workers’ Compensation In Alabama.