Workers Getting Hired Through Apps Considered Independent Contractors, Labor Department Says

Wall Street Journal writer Eric Morath reported this week that, “Workers lining up jobs through smartphone apps and websites such as Handy and Angie’s List are independent contractors and not employees of those platforms, the Labor Department said in a letter Monday.

“An unidentified ‘virtual marketplace company’ sought clarification on whether service providers hired through the platform are considered employees under the Fair Labor Standards Act, the letter said.

“The 1938 law addresses minimum wage, overtime and other labor rules. The publicly issued ‘opinion letter’ said service providers are not working for the virtual marketplace, but working for consumers through the marketplace.”

The Journal article noted that, “While the Fair Labor Standards Act ‘has a very broad scope of coverage, it is not so broad that all workers are caught within its reach—far from it,’ the letter stated.

The letter doesn’t represent a new regulation or law, and doesn’t carry the same weight in court. It serves to demonstrate how the department would make determinations on relevant questions—if it were asked, for example, whether a violation of overtime laws occurred.”

Mr. Morath added that, “The letter isn’t binding, and could be reversed or disregarded by future administrations. Still, it is important because it provides guidance on how the department interprets an 80-year-old law in a world where people can land jobs in moments through apps on their phones.”

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