Members of the Texas Workforce Commission voted to approve a labor law exemption for companies hiring workers to perform app-based tasks. According to Austin’s NPR station KUT 90.5, contract or “gig economy” workers are no longer eligible for unemployment insurance benefits in the Lone Star State. Because of this change, companies relying upon gig workers are exempt from paying the state taxes required to provide and fund unemployment benefits.

An employer may run into legal trouble by classifying workers as independent contractors when they are actually employees. Generally, contract workers may set their own labor hours and perform their tasks without direct supervision. Employees, on the other hand, generally adhere to a set work schedule, follow detailed instructions for completing their duties and come into the company’s workplace on a regular basis.

Companies may begin shifting away from conducting business in a brick-and-mortar setting and move toward carrying out their operations within a virtual environment through a website portal or app. The potential challenge that may accompany running a virtual company is the need to attract contractor workers who will perform in a manner that will consistently meet customers’ expectations.

Remote workers can sign employment agreements

Many gig workers are willing to take on remote or contractor positions that offer flexibility, as reported by Inc. magazine. Accordingly, 76% of younger employees surveyed stated that they would work for a company for less pay if it allows them to work flexible hours.

Although a company may not directly manage a contract worker’s activities, it may require its remote staff members to sign a confidentiality agreement. Employment contracts may stipulate nondisclosure of confidential information, client lists and other material essentials relevant to a business’s operations. A company may also hold a gig worker who is in breach of contract liable for damages.