The sharing economy grows daily, with peer-to-peer marketplaces such as Uber, Lyft, TaskRabbit, HomeJoy, Instacart, and Postmates gaining workers daily. A bastion of hope for those unemployed or underemployed in today’s undoubtedly interesting economy, how are these individuals handled by such platforms when on-the-job injuries occur? Often in the dark on the intricacies of workers comp insurance until such injuries occur, many do not realize the true price of the sharing economy’s perceived freedom until it’s too late.
Car-service apps are frequently in headlines involving violent assaults. However, with other industries affected by slip-and-fall or more mundane repetitive-use injuries, all resulting in lost income and medical costs for workers, who pays?
A convoluted employment scenario
Workers comp insurance as it was designed decades ago fits much like a square peg into the round hole of today’s rapidly mutating sharing economy business model. Naïve to the arrangement, workers realize their classification as independent contractors far too late, and as such, without medical, workers comp, and paid sick leave protections. Conversely, this also leads to worker misclassification lawsuits as well as uncapped lawsuits for damages should businesses be found liable of any wrongdoing (such as assigning known violent clients), when providing workers comp coverage would have protected them from such risks.
Looking to the future
Instead of worker misclassification lawsuits, the future is likely to behold changes in the protections required to be provided for independent contractors, or the possible decoupling of health and workers comp insurance from employers into the hands of workers, much like yesteryear’s pension-plans.
Lost in a sea of workers comp insurance confusion? Minnesota Comp Advisor can help. Contact us today.