by Samantha J. Bily, Esq.

Companies can face unanticipated liability when workers cannot be easily classified as “independent contractors” or “employees.” Rideshare companies are experiencing this firsthand. Two separate judges in California recently held that, despite the companies’ intent to classify their workers as “independent contractors,” the classification of Uber and Lyft drivers would be left to the jury. The classification of workers affects a company’s liability for workplace injuries, potentially giving rise to unanticipated workers’ compensation and/or tort liability.

Under Georgia Workers’ Compensation law, three main factors are considered in classifying workers as “independent contractors”:

1) a contract exists
2) the contractor has the right to control the time, manner, and method of the work to be performed
3) the contractor is paid a set amount per job, rather than hourly or salary.

Issues often arise concerning the second factor, the contractor’s control over the time, manner, and method of performing services. Where a worker performs services using his own equipment and techniques but is instructed on the hours during which he is to perform services, he may be classified as an “employee,” despite the large amount of control he exerts over the manner and method of his work. Where a worker clocks in and out at his discretion but performs services pursuant to company-proscribed procedures, he may also be classified as an “employee,” despite his ability to come and go as he pleases.

While the above prerequisites are most strongly considered, Judges often evaluate other factors in classifying workers, such as whether the agreement contemplates a beginning and end, the contractor furnishes his own tools, the services require a significant level of skill, the employer does not withhold taxes, and the contractor is free to work for other entities. Each of the foregoing considerations favors contractor status.

Ultimately, a company’s decision to hire workers as “employees” or “independent contractors” should be made based on the company’s specific needs and circumstances. Once a decision is made, however, taking into consideration the above factors and making the necessary distinctions can assist in avoiding unanticipated liability.