The workforce is changing, and companies that use or supply contingent labor – independent contractors, staffing agency workers, gig workers, and more – face countless hidden legal risks.
Today, BakerHostetler is proud to announce our new Contingent Workforce team, a practice that is dedicated to helping companies navigate these risks.
Contingent labor, non-employee labor, temporary labor, freelancers – no matter the name given to the millions of individuals who comprise today's thriving temporary labor and gig economies – are here to stay. Last year, the Bureau of Labor Statistics reported that "gig workers" comprise 35 percent of the nation's workforce, with people of all ages and backgrounds taking advantage of the flexible schedules and supplemental incomes offered by companies that utilize independent contractors.
For workers, opportunities abound. For business owners, legal issues are just as numerous.
"So many businesses use non-employee workers, and a lot of them either have no idea or a limited understanding of the risks that they are taking," said Partner Todd Lebowitz, co-leader of the firm's newly formed Contingent Workforce team. The team – co-led by Partner Mark Zisholtz – consists of experienced attorneys who guide employers through the challenges posed by the transforming labor market, currently defined by short-term contracts and nontraditional positions. Lebowitz and Zisholtz have both made dealing with contingent workforce issues a focal point of their practice.
To show their depth and breadth of experience with helping clients understand these challenges, they recently developed The Playbook, a guide that neatly outlines the impact of California's Assembly Bill 5, the recently signed law that makes it significantly harder to classify workers in that state as independent contractors. Thousands of independent contractors in California may instantly become employees when AB 5 takes effect on January 1, 2020, and the law may even apply retroactively. The Playbook provides companies with actionable strategies to consider in response to the new law.
The Contingent Workforce team consists of lawyers across multiple practice groups, including employment law, employee benefits, tax, corporate transactions, immigration and government contracts. This multi-disciplinary approach sets BakerHostetler's team apart from other firms that may only focus on labor and employment law.
The mix is important, because the legal risks extend beyond employment. The team is well-positioned to address tax controversies, benefit plan structures, and mergers and acquisitions for a broad range of clients, including gig economy platforms, managed services providers, and vendor management systems. The team has ample experience litigating contingent workforce disputes as well, including in class and collective actions, attorneys' general actions, and audits.
"Our experience also extends beyond advising companies that use contingent labor; we advise suppliers, too," Zisholtz added. "For example, when the pass-through tax deduction for passive entities came into law, we sought to notify the owners of our staffing firm clients about they could benefit. Using a proactive approach, we were able to create a short overview of the law for our staffing agency clients, and several were able to take advantage of it."
That's the sort of forward-thinking approach that the Contingent Workforce team can duplicate for any clients who use or supply contingent labor.
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