In August, Vox Media paid out $4 million to settle three different lawsuits from employees who claimed they were misclassified according to the law. In the wake of regulations like California’s Assembly Bill 5 (AB5), guidelines were in place to differentiate between full-time employees and independent contractors.

Vox failed to classify these workers properly, and that misstep ended up costing it millions. But Vox isn’t the only company guilty of employee misclassification. Employee law is beginning to catch up with the gig economy, but many organizations haven’t yet familiarized themselves with these new regulations.

Luckily, there are simple strategies for staying informed about the latest changes to employment law. Here are a few suggestions to get you started:


Find an informed and credible partner.

There are several reasons organizations might struggle with something like AB5 compliance; chief among them is a simple lack of understanding. Business leaders aren’t usually experts in HR and labor laws. As a result, they can easily make incorrect — and costly — assumptions.

While many companies might not have the time or resources to keep up with the changing employment landscape, there are businesses that specialize in this kind of moving target. These companies can provide up-to-date insights into regulatory changes such as AB5.

Vox likely could have saved itself stress, confusion, and costly mistakes by teaming with knowledgeable compliance experts. A partner or employer of record agency — like Innovative Employee Solutions (IES) — has a deep understanding of employment laws in California and the other 49 states. These partners know how these laws affect staffing, which can help companies stay informed and out of the courtroom.


Be proactive, not reactive.

Vox Media wasn’t sued due to a misunderstanding of the law — it happened because Vox didn’t fix the problem fast enough. Waiting and hoping that the regulations will change before you have to act could cost your company millions of dollars.

While companies like Lyft might have the money, resources, and options to push back against regulations in various states, others don’t have that luxury. Even if they did, it would mean using workers as political leverage. Rather than playing a political game that you might lose, spend your time reclassifying workers appropriately and getting back to work.


Take AB5’s lessons to heart.

The jurisdiction of the AB5 independent contractor test may stop at California’s borders, but its influence won’t. Already, states like New JerseyNew York, and Illinois are implementing similar regulations. While every state might not follow their lead, officials in many locales will closely monitor AB5 to see whether they should consider crafting similar legislation.

A list of exceptions for AB5 is being finalized, and it will likely continue to evolve as real-world issues come to light. It’s critical that every business, regardless of whether it operates in California, pay attention to the law’s successes and failures. Its path will provide a helpful blueprint for the future.

It’s understandable to be worried about Vox Media’s employee misclassification woes, but there’s no reason your business has to fall into the same trap. By being vigilant and partnering with people who can help you stay informed, it is definitely possible to keep up with the ever-changing world of modern employment law.


Are you curious to see whether your current workforce complies with classification laws? Learn more about employee misclassification at our website, and consider using our interactive Risk Calculator tool.

You can assess your risk level, liability, and penalties and fees in just a few steps. Make sure your workers are correctly classified today.



Antonio Barraza is a business development representative and contingent workforce expert at Innovative Employee Solutions (IES), leading global Employer of Record in more than 150 countries that specializes in contingent workforce solutions such as outsourced payrolling, independent contractor compliance, and contractor management services. Founded in 1974, IES has grown into one of San Diego’s largest women-owned businesses and has been named one of the city’s “Best Places to Work” for 10 years in a row.

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