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The legal understanding of a marketplace contractor

A marketplace contractor has increased work opportunities through an online marketplace or phone app. Independent workers are able to obtain assignments freely; yet, they have fewer rights and duties that are protected in court. Employment agencies in Texas define who marketplace contractors are and how their obligations apply to the law.

Defining a marketplace contractor

The Texas Workforce Commission (TWC) defines a marketplace contractor as an individual, company or organization that provides professional services through a marketplace platform. The digital network provides a variety of services to workers from clients who are members of the general public.

Marketplace contractors are not employees and cannot receive the benefits that are available to employees, such as unemployment funds and workers’ compensation. Contractors control their work hours and earnings and have to file their own taxes. Since they have fewer rights under employment law, marketplace contractors have greater difficulties in pursuing legal action against the network provider.

The reasons for lawsuits

In an employment lawsuit, a common complaint is the misclassification of an employee for an independent contractor. Other employment law issues include salary misclassification and the unlawful termination of employment. An employer who deliberately misclassifies a worker can be sued and forced to pay the compensation that is owed to the worker.

A marketplace contractor agrees to perform services through a marketplace platform that may include a website, app or software. The workers are classified as independent contractors that receive changing salaries with no benefits. Many employers misclassify their employees as contractors to avoid providing benefits. In addition to misclassifications, overtime pay, minimum wage and wrongful termination are similar issues that are protected under the state’s employment laws.