Over the past week, the legal battle between Uber, Lyft and a group of the ride-sharing firms’ drivers took an important turn when two San Francisco judges, in separate rulings, found that lawsuits filed by the drivers should go before juries, as was reported in the Wall Street Journal. The WSJ went on to say that “at issue in both cases is whether drivers, who are employed as (1099) independent contractors, should be considered employees of those firms, and thus entitled to the protections afforded most full-time workers.”
While misclassifying 1099 workers is not new, over the past few years the Department of Labor and the IRS have been executing a nationwide crackdown to end such practices. Other than employee rights, a significant loss of state and federal revenue, the Affordable Care Act and other critical considerations, part of the focus on 1099 misclassification is the fact that it spans dozens of industries, including experiential marketing and event staffing.
In event staffing, where a large portion of brand ambassadors are regularly misclassified as 1099 workers, this case is enormously significant. The WSJ article continues by stating that, “should the cases proceed to trial, the resulting verdicts could also set a legal precedent about how many workers should be classified in the so-called on-demand economy“; an arena in which event marketing surely applies. In addition, with the introduction of www.bookedout.com and the fact that many event staffing agencies are using hiring apps, the case is directly relevant.
In addition to establishing precedent, this type of continuing employment law litigation also keeps the issue in the spotlight, where any worker who is hired as 1099 yet is “treated as an employee” can bring a lawsuit against an employer. As the WSJ indicates, “the plaintiffs suing Uber say they should be treated as employees because the company allegedly exerts significant control over their work, sets compensation and vehicle standards, and can terminate drivers at will.” In the event staffing industry, the vast majority of event staff are told exactly what to do and say (significant control over work), their compensation standards are set, and they can be dismissed at will. As a result, by the measure of the law, these are employees, not contractors.
This case is not only important to agencies that hire 1099 event staff, but also to those who work with a staffing agency that does. The risk of co-employment is high in event marketing, where it is regular practice for a marketing agency representative or brand agency client to be on-site directing the activities of the staff.
Since 2008, EventPro Strategies has exclusively hired all of our event staff as W-2 variable hour employees. Not only do we avoid issues related to litigation and non-compliance, we are protecting our clients from regulatory and financial liability. To learn more about W-2 hiring and the dangers of misclassifying employees as 1099 independent contractors, please contact Kelly Springs-Kelly, Director of Marketing, at email@example.com.