End Independent Contractor Misclassification

Many corporations misclassify employees as self-employed “independent contractors” to deny them employee protections and offload business costs and risks.

Who Is an Independent Contractor?

True independent contractors are people who are in business for themselves. They make all the important decisions about how to run their business, like:

deciding what goods or services to sell
setting or negotiating prices
deciding how to market their business to customers

Why Do Companies Misclassify Employees as Independent Contractors?

Many corporations misclassify the employees powering their businesses as “independent contractors” to:

minimize payroll costs
maximize profits
strip workers of labor and employment protections

Although these corporations may set pay and other key terms of work that determine job quality, they seek to shed responsibility for meeting basic labor standards.

Increasingly, corporations use technology—like surveillance tools, algorithms, and digital applications—to supervise, monitor, and control workers, while falsely claiming that these workers are independent contractors excluded from labor and employment law protections.

Labor Rights & Protections for Employees versus Independent Contractors


❌	Right to organize and bargain collectively	✅
❌	Right to a minimum wage and overtime pay	✅
❌	Right to paid sick leave	✅
❌	Employer contributions to paid family and medical leave	✅
❌	Employer-funded workers’ compensation	✅
❌	Employer contributions to Social Security, retirement	✅
❌	Right to a safe and healthy workplace	✅
❌	Protections against discrimination and harassment	✅

Independent Contractor Misclassification Is a Racial Justice Issue

The illegal practice of independent contractor misclassification is strikingly racialized, occurring in low-wage, labor-intensive occupations—like construction laborer, truck driver, and home care aide—in which Black and immigrant workers are overrepresented.

And the growing pool of app-based workers—who are often labeled independent contractors—is disproportionately people of color. While Black and Latinx workers comprise about 29 percent of the U.S. workforce, they are 42 percent of workers for Uber, Lyft, and other digital labor platforms.

Corporations Are Trying to Strip Away Workers’ Rights

Over the past decade, corporate-backed policy campaigns have changed state laws to limit employer accountability and reduce the share of U.S. workers with full employee rights. These labor deregulation efforts have carved out workers from state minimum wage, unemployment insurance, and other labor and employment laws. Now corporations are setting their sights on federal policy change.

Powerful companies like Uber and Amazon, as well as their lobby groups like the Coalition for Workforce Innovation, are leading multi-million-dollar lobbying efforts to rewrite laws that favor their exploitative business models and harm workers and consumers.

How Workers Win

Unionized workers in many industries are joining with app-based ride-hail and delivery workers to combat independent contractor misclassification and the corporate push to grow “independent work”—work done by “independent contractors” or nonemployees who don’t have access to the full gamut of employment-based rights and protections. Workers are making direct demands of employers, taking legal action to challenge independent contractor misclassification, and engaging in pro-worker policy advocacy.

Policymakers must adopt a presumption that workers are employees under labor and employment laws, especially for workers who are susceptible to employer abuse. For example, the “ABC” test presumes that workers are employees and requires a business entity that engages an individual worker to demonstrate otherwise. Workers in low-paid sectors face high levels of wage theft and other forms of employer abuse. They should have access to organizing and bargaining rights; as well as wage, safety, unemployment, and other labor protections, regardless of their immigration status or the labels their employers assign to them.

Watch: The ABCs of Independent Contractor Status

Workers can demand that policymakers:

Make independent contractor misclassification a violation in itself, subject to monetary penalties.
Allow workers to sue employers in court for independent contractor misclassification, with strong penalties that include attorneys’ fees.
Ban forced arbitration and class action waivers so that workers can band together to bring their misclassification cases to a public, impartial court.
Pass laws that provide workers with true flexibility to balance work and life, including paid family and medical leave, paid sick leave, paid vacation, and scheduling predictability and choice.
Policy recommendations from How the Coalition for Workforce Innovation is Putting Workers Rights at Risk
Watch: Statement from Senator Elizabeth Warren at a Congressional Briefing on the Coalition for Workforce Innovation in December 2022
Workers Demand True Flexibility with Full Employment Protections

We are advocating for the government to:

Strengthen enforcement at the local, state, and federal levels to root out independent contractor misclassification and to create real mechanisms for workers to seek recourse against employers who misclassify them.
Resource the agencies that implement labor and employment laws so that they can conduct regular employer audits and strategic enforcement—involving community partners—in high-violation industries and engage in effective cross-agency collaboration.
Public Task Forces Take on Employee Misclassification