McKenzie Young is a traveling nurse from California who works in Hawaii. She gets placements though an agency that connects her to temporary jobs around the state and country. Her assignments can last anywhere from a couple of weeks to months at a time.
When Young returns to the mainland, she plans to sign up on a nursing placement app for shorter-term freelance nurses who get paid by picking up shifts at nearby medical facilities.
Currently, her gig in Hawaii pays Young by the hour. She gets medical insurance through the hospital to which she is assigned, and she opted to pay out-of-pocket for her own individualized retirement plan.
“If you can do it smart that way and make sure you’re giving what you should and set up the accounts you need, I can put even more into my retirement because I’m making more,” Young said. “It’s hard going back to staff.
Young says more nurses would opt for freelance work if they knew how flexible and lucrative it can be. And because there is a nursing shortage, she never has to worry about not finding temporary assignments.
As more nurses like Young enter the gig economy seeking higher pay rates and more control over their work schedules, some advocates assert that hospitals that contract nurses often misclassify them as independent contractors, a practice that comes with “tremendous legal and regulatory risks.”
“When workers are misclassified as independent contractors, there is a damaging domino effect that impacts all levels of our economy. In this case, caretakers were systematically denied minimum wage, overtime, and other legally required working conditions," said California Labor Commissioner Lilia García-Brower.
Nurses have access to various apps that help them find work. Just like dating apps, many of these apps enable users to browse through job options by scrolling or swiping until they find a suitable job, facility, and working hours.
Within the spectrum of these healthcare staffing apps, some provide 1099 workers who are farmed out as independent contractors. Other companies like IntelyCare and ShiftMed hire healthcare staff as W-2 employees, who are eligible for benefits not accorded to 1099 workers.
On March 13, California Courts of Appeal Justices ruled that Proposition 22 (a 2020 ballot measure that allowed Lyft, Uber and other gig economy platforms to classify their workers as independent contractors rather than employees) is constitutional.
Executive secretary-treasurer of the California Labor Federation, Lorena Gonzalez Fletcher, issued a press release speaking out against the court’s decision.
“Today the Appeals Court chose to stand with powerful corporations over working people, allowing companies to buy their way out of our state’s labor laws and undermine our state constitution,” Gonzalez Fletcher said. “Our system is broken. It would be an understatement to say we are disappointed by this decision.”
Gonzalez Fletcher, who as an Assemblymember authored Assembly Bill 5 (AB 5), which established stricter criteria for classifying workers as independent contractors rather than employees, has been a vocal supporter of legislation prohibiting companies from hiring freelance workers to avoid paying them benefits they are entitled to under California’s labor laws.
The distinction between being an employee and independent contractor is very important, advocates like Gonzalez Fletcher point out. Employees have the right to benefits including sick and family leave, unemployment benefits, minimum wage and more. With 36% of workers in the US in the gig economy, the ongoing battle for these distinctions continues to rage on with both sides contesting court decisions made in the other’s favor.
This past year home healthcare placement agencies were fined $1.8 million by the California Labor Commissioner's Office for misclassifying 66 workers. Healthcare app-based staffing company CareRev was sued for misclassifying workers who signed up on the app as contractors.
Advocates point out that the healthcare industry is more regulated than the rideshare industry.
“Any nurse who walks into a long-term care or memory care facility will have a long list of rules and protocols that need to be followed. They are often given access badges, a work schedule, a patient list, and time slots for medication, food, or exercise rotation,” reads a press release advocates published describing how companies are benefitting from hiring contract nurses and not paying them benefits fulltime employees must receive by law.
So far, no bill has been introduced in the California legislature to regulate health care industry staffing apps, but advocates say the problems they are posing will hurt health care workers and the industry writ large.
“Misclassification opens the door for joint employer liability and legal wage and hour disputes,” advocates added in the press release.