What happens to workers when a ‘gig economy’ company folds? | Katz Melinger PLLC
Katz Melinger PLLC
Free Initial Phone Consultation
Menu Contact
Free Initial Phone Consultation
Proactive. Pragmatic.
Committed To Obtaining Results.

What happens to workers when a ‘gig economy’ company folds?

Workers continue to enter the “gig economy” in large numbers. According to a 2016 report by the McKinsey Global Institute, up to 30 percent of workers in the United States and Europe take part in some form of independent work.

For some, the work may be side jobs, but others rely solely on one or more of these gigs for their entire income. In many cases, the workers are independent contractors, meaning they don’t have as many rights as employees. So what happens if the company goes out of business?

Startups are volatile, and many fail. In a recent example, a company that matched babysitters with families in a dozen cities ran into financial troubles. The company is now looking to file for bankruptcy, and more than 100 people who worked as contractors say the company owes them, collectively, around $85,000.

The workers are trying to determine how to recover their unpaid wages.

Legal precedence

The gig economy is still a new concept. While companies often end up shutting their doors in the early stages, there isn’t a long track record of how to navigate what happens to workers who are owed unpaid wages.

New York has clear regulations regarding contract workers. However, cases like the one mentioned are complex and have few clear answers. In some instances, the company may have incorrectly classified workers as independent contractors when they should have been employees.

It requires nuance to navigate employee and independent contractor cases, especially as more workers move into the gig economy.

No Comments

Leave a comment
Comment Information
Email Us For A Response

Schedule Your Consultation Today

To begin protecting your legal rights and financial interests, schedule an initial consultation. We clearly communicate your legal options in an honest manner.

Contact Katz Melinger PLLC at 212-460-0047 or reach us by filling out the form below.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Office Address

Katz Melinger PLLC
280 Madison Avenue
Suite 600
New York, NY 10016

Phone: 212-460-0047
Fax: 212-428-6811
New York Law Office Map

Review Us

Can we help you find a topic?