The question of worker classification, specifically whether individuals performing services are classified as independent contractors or employees, has significant legal and economic implications. For example, this classification impacts entitlements to benefits like minimum wage, overtime pay, unemployment insurance, and workers’ compensation. It also affects tax withholding responsibilities and the degree of control a company exerts over the worker.
Proper classification is crucial for businesses to comply with labor laws and avoid potential legal challenges and financial penalties. For workers, accurate classification ensures fair treatment, access to deserved benefits, and a clear understanding of their rights and responsibilities. Historically, the rise of the gig economy and platform-based work has intensified scrutiny of this issue, generating numerous legal battles and regulatory debates worldwide.
