New Section Created by the Govenor to Combat Employee Misclassification

On December 18, 2015, Governor McCrory issued Executive Order Number 83, which created a new section in the Industrial Commission to combat employee misclassification.  Employee misclassification is when employers classify employees as independent contractors to avoid liabilities and obligations required by state and federal law. 

The Order allows the Industrial Commission to employ inspectors and respond to complaints that employers may be misclassifying employees.  The Section will have liaisons from the Department of Revenue and the Employment Security Division.  In addition, the Commissioner of Labor and the Commissioner of Insurance have the opportunity to appoint liaisons to the section as well. 

While there is a need for an enforcement agency to respond to misclassification complaints, we hope that this joint-effort also creates an opportunity for North Carolina to take a thoughtful, coordinated approach to the new "gig" or "on-demand" economy model.   The gig economy is characterized by freelancers looking for short-term work or "gigs."  They are enabled by Uber, Lyft,  Airbnb, Etsy, and TaskRabbit.  The troubles of classifying these individuals have been reported on in several different  articles over the past year.