App-based platforms have transformed the ways countless industries do business. Need a ride or forgot an item at the store? All you need to do is open your phone.
Although those “on-demand” services come with many advantages, an alarming number of app-based platforms are misclassifying industrial, hospitality, healthcare and other temporary workers as independent contractors instead of W2 employees. Doing so not only deprives those workers of health and other benefits, overtime pay and worker’s compensation insurance; it creates serious risk.
In industries such as healthcare, the stakes are especially high, because worker misclassification threatens resident and patient safety. Final rules issued last month by the Department of Labor make it abundantly clear that providing bedside care is not the same as providing a ride — and that the risks of misclassification are higher in healthcare because human lives are at stake.
The new rules, which went into effect March 11, make it more difficult to classify workers as independent contractors. Supervision and training are key factors in classifying workers, and with multiple references to temporary healthcare staffing, the new rules make it clear the government is concerned that healthcare workers have the training and supervision they need to provide proper resident and patient care.
Anyone familiar with healthcare knows that temporary nurses and aides assigned to healthcare facilities are not working independently; they work under close supervision. A growing number of DOL lawsuits against healthcare staffing platforms that illegally classify workers as independent contractors promise to hold these companies accountable.
Temporary nurses and nurse aides historically have been classified as W2 employees because of the inherent nature of their work. Their work is directed by the facility, and they are required to follow set protocols — unlike physicians or advanced degree nurse practitioners who might legitimately work as contractors because of their specialized expertise.
The overwhelming majority of healthcare staffing firms operate as W2 firms because it’s the right model for the highly controlled healthcare setting. 1099 firms that avoid employer responsibilities gain a competitive advantage, up to 30% by some estimates. But their savings put everyone else at risk. Workers miss out on benefits, healthcare facilities are exposed to financial and legal risk if deemed a joint employer of a misclassified worker, and resident and patient care is compromised when temporary nurses are sent to work without proper training and support.
A broad coalition of W2 healthcare staffing firms has spoken out against misclassification and, along with the American Staffing Association, is calling for stepped up enforcement of the rules by policy makers and regulators at all levels.
Unless strong action is taken, 1099 platform providers will create a new era where inadequately trained and poorly supervised independent contractors become the new norm for temporary nursing care.
Ed Lenz, Esq., is senior counsel at the American Staffing Association.
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The opinions expressed in each McKnight’s Senior Living guest column are those of the author and are not necessarily those of McKnight’s Senior Living.
