This article originally appeared in the July 2018 edition of Mobility Magazine.
Employers must still comply with
immigration and antidiscrimination laws.
For workers who seek more autonomy, more flexibility, or a second income, the idea of a freelance job, or “gig,” may sound like a good option. For employers who can’t provide full-time employment and benefits or who need temporary additional services, hiring freelance and gig workers may also sound like a good option. But U.S. employers must still remember to comply with immigration and antidiscrimination laws when dealing with such workers, otherwise known as independent contractors.
Here are some frequently asked questions and tips for immigration compliance when dealing with an independent contractor workforce, especially in light of even more scrutiny under the Buy American and Hire American (BAHA) executive order.
What is a gig worker?
According to a May 2016 article from the Bureau of Labor Statistics, there is no official definition of a gig worker, but generally the term refers to an independent contractor who is hired temporarily for a single project or task.
Gig workers are more common in certain industries, such as in media and communications, where interpreters and translators may be hired to help expatriated employees learn a new language and assimilate into their new country. Gig workers are also popular in the computer and information technology industry, in which someone might be hired for a one-time service, such as to manage a database project, build a website, or develop software.
Other industries frequently using gig workers include transportation and material moving; construction and extraction occupations such as a carpenter or painter; or the arts and design industry, in which musicians or graphic designers take on gigs.
What is a freelancer?
A freelancer is similar to a gig worker. According to an October 2015 article from the Bureau of Labor Statistics, a freelancer is an independent contractor who works gig to gig or project to project.
What is an independent contractor?
The definition under U.S. immigration law is similar to the definition used by the Internal Revenue Service. Under immigration regulations:
“Independent contractor includes individuals or entities who carry on independent business, contract to do a piece of work according to their own means and methods, and are subject to control only as to results. Whether an individual or entity is an independent contractor—regardless of what the individual or entity calls itself—will be determined on a case-by-case basis. Factors to be considered in that determination include, but are not limited to, whether the individual or entity: supplies the tools or materials; makes services available to the general public; works for a number of clients at the same time; has an opportunity for profit or loss as a result of labor or services provided; invests in the facilities for work; directs the order or sequence in which the work is to be done; and determines the hours during which the work is to be done.” See 8 CFR Section 274a.1(j).
In addition to U.S. federal statute and regulations, employers should look to federal case law as well as state statutes and regulations and state case law.
The California Supreme Court in Dynamix Operations West v. Superior Court issued a decision on 30 April 2018 related to whether someone is an employee or independent contractor. The California Supreme Court adopted the “ABC test” and stated:
“Under this [ABC] test, a worker is properly considered an independent contractor to whom a wage order does not apply only if the hiring entity establishes: (a) that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact; (b) that the worker performs work that is outside the usual course of the hiring entity’s business; and (c) that the worker is customarily engaged in independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.”
For example, if an IT professional works independently from an energy company, the IT services provided are not customarily provided by the energy company, and the IT professional customarily works independently as an IT worker, then the IT professional may be an independent contractor under the ABC test.
What does the Buy American and Hire American executive order say?
Read the rest of this article in the July 2018 edition of Mobility Magazine.