Introduction
While working for a company or organization, it is essential for all people to know their rights and especially status as it influences wages and other important aspects of the job. When Uber and Lyft, two major ridesharing companies, characterized their drivers not as employees but as independent contractors, the drivers started arguing that they are, in fact, employees. The purpose of this paper is to explain the difference between an independent contractor and employee and list the factors that determine whether an individual is one or the other. Also, the possible reasons why the drivers want to be characterized as employees will be provided.
Differences Between Employees and Independent Contractors
There is a list of differences that helps to determine whether a person is an independent contractor or an employee. The first one is that independent contractors are like business owners. They may have many clients and a business name, while employees work for a company and have to report to their chief. The second difference is that independent contractors submit bills for their work instead of working for a certain wage.
Another factor is that independent contractors, unlike employees, are the ones who determine their working hours. Also, a manager or a client cannot influence the way independent contractors work and treat them as employees. Another important difference is that the organization pays taxes for its employees, while the independent contractors have to do it themselves. Finally, it is financially profitable for the organization to hire an independent contractor as it does not need to provide benefits like retirement plans, stock options, and health insurance. Also, while employees get some legal protections like workers’ compensation, anti-discrimination, and unemployment, independent contractors may just have some have basic insurance requirements.
Factors That Determine Worker’s Status
In order to determine whether a person is an independent contractor or an employee, the organization answers four questions and weighs the factors to identify the amount of control it has over the person. The first question is whether the company controls or is able to control how the worker does the job (“What’s the difference between,” 2018). The second is if the company controls the business aspects like whether expenses are reimbursed and how the person is paid.
The third question is whether there is a written contract, insurance, vacation pay, and a pension plan for the worker. Finally, the fourth question is whether the relationships between a person and a company will continue after the work is done (“What’s the difference between,” 2018). If the answers to at least three of four of these questions are positive, then a person is an employee.
Uber and Lyft Drivers
As it was said above, Uber and Lyft characterized their drivers not as employees but as independent contractors, and the drivers were not satisfied with that. To answer the question of why they prefer to be employees, it is enough to look at the differences that were listed above. Employees get legal protections like workers’ compensation, anti-discrimination, and unemployment, and it seems that this is the main reason why the drivers do not want to be determined as independent contractors.
Basing on my research, I think that the drivers are independent contractors, and to understand this, I found Uber’s website (“Get ready to drive with Uber,” 2020). The company promises that its workers are able to make and receive money on their schedule, be their own bosses, and work in many organizations at the same time. According to the information above, these are the characteristics of an independent contractor.
Conclusion
To draw a conclusion, one may say that it is both essential and sometimes challenging to determine whether a person is an employee or an independent contractor. Not only they have different rights and guarantees, but also responsibilities. If some people are ready to be independent contractors and work for themselves, others may want to have more privileges like insurance and retirement plans and less freedom.
References
Get ready to drive with Uber. (2020). Web.
What’s the difference between an independent contractor and an employee? (2018). Web.