The status of independent contractors is one of the fundamental dividing lines in today’s economy. Independent contractors receive no benefits. There is no paid vacation, no paid sick leave, no retirement. If they are injured on the job, there is no work comp. In a word, independent contractors — mainstays of the Gig economy — routinely receive nothing beyond a raw payment for services rendered.
This brings us to a March article in the Boston Globe concerning Harvard University’s Center for Wellness. Kara Donohoe, a massage therapist, worked for years classified as an independent contractor. Her activities, however, were tightly circumscribed: the university managed her appointments, determined her payment rates and forbid her from collecting tips; the same controls were imposed on the center’s acupuncturists.
Alum Schools the University
In 2016 Donohoe became the lead plaintiff in a class-action lawsuit claiming that she and her 20 co-workers were, in fact, employees of the university. Her attorney, Shannon Liss-Riordan, appropriately learned her craft as a Harvard undergraduate and at Harvard Law School. Under the settlement negotiated by Liss-Riordan, workers at the school’s Center for Wellness will be reclassified as employees and will receive as much as $30,000 apiece in back pay. They will also enjoy the university’s robust benefits package, which includes, of course, workers’ compensation coverage.
While Harvard’s motivation may well stem from being in apparent violation of state law, there is a truly radical dimension to this situation: Harvard has recognized that they may have a problem in the way they define and engage independent contractors. This class action has opened the door to a reconsideration of independent contractors throughout the university. Liss-Riordan has high praise for her alma mater: “Harvard is a role model for many employers out there, and I hope other employers take note of how Harvard handled the situation.”
Harvard has taken steps to ensure the wellness of the Wellness Center’s workers, along with other workers who provide services throughout the institution. A race to the top. How novel, how welcome!
About the Author:
Since 1990 Jon Coppelman has trained thousands of business owners from Main Street to Fortune 500 on the fundamentals of workers’ compensation cost control. From 2006 to 2012 he was a principal writer for the Workers’ Comp Insider, LynchRyan’s first-in-the-nation blog dedicated to risk management issues. He currently divides his time between his consulting businesses and his role as Senior Workers’ Compensation Consultant for the Renaissance Alliance, an aggregator based in Wellesley, MA serving more than 90 local agencies across New England.