Opposite Sides of the Same Coin: Worker Classification in the New Economy

Abstract

Massive changes have disrupted the institution of employment. The growth of the service sector, technological advancements, and developments in the finance market have created a demand for new employment models. Employers have responded by increasingly utilizing independent contractors to fill positions traditionally held by employees. Designating a worker as either employee or independent contractor determines the degree to which employment law applies to the worker. An independent contractor falls outside many of the benefits and protections that the law provides employees. Currently, courts, states, and administrative agencies use a confusing array of employment tests, created for different purposes and different eras, to classify workers as either employees or independent contractors. In this article, I propose a new legal test for employee status focused on the presence of factors indicating entrepreneurship. Entrepreneurship represents the essence of independent contractor status. To determine the presence of entrepreneurship, I look to the academic study of the field, examine the various definitions, and create a workable legal test