Reference no: EM133632251

Case: As the Director of Operations for Senior Connect, Megan Morales is excited as the company expands to a tenth city with a concierge service targeted at retirees and other senior citizens. The service connects clients with contract workers, called Runners, who help run errands such as picking up prescription medication or groceries. Senior Connect targets the senior citizen market because most other concierge services are only delivered via smartphone apps. Senior Connect does have a smartphone app, but services can also be obtained by making a telephone call, making it an attractive option for older community members.

Currently in addition to the Runners, Senior Connect employs full-time employees at a small call center to take the telephone calls and a corporate staff that includes professionals such as operations management, marketing, and finance. The Runners are classified as independent contractors. They are not considered employees, which is important because they are not eligible to participate in the generous employee benefits program the company offers. With nearly 100 Runners, many working nearly full-time hours, Megan knows that the company benefits costs would increase significantly if the Runners were employees.

After attending a recent seminar about the growing use of gig workers, Megan is concerned that maybe the Runners should be considered employees instead of independent contractors. The speaker at the seminar shared a story about another company that was involved in a costly lawsuit because they had incorrectly classified employees as independent contractors. Megan has decided she needs to review the terms and conditions of the arrangement with the Runners to make sure they are properly classified.

Based on what she learned at the seminar, Megan begins making notes about the Runners to determine if they are classified properly. Unlike other smartphone app services that allow workers to log in and pick up errands when the worker is interested in working, the Runners at Senior Connect have assigned shifts based on client needs. The company found the older clients prefer to have the same worker run their errands. The clients value developing relationships with the Runners, which is why they pick Senior Connect over other options. In fact, the Runners regularly get feedback from supervisors who make sure that the clients are satisfied with the services.

Even though Megan considers them gig workers, most Runners work nearly full-time for Senior Connect. To make the scheduling of shifts fair for the Runners, Megan makes sure each shift is at least four hours, and the Runners are paid by the hour to make sure they receive compensation for any time they are on call. The company asks them to make Senior Connect a priority, knowing that the clients prefer the stability of working with the same Runner. As a result, very few Runners have other gigs, making the Runners dependent on Senior Connect as their primary source of income. Finally, the Runners use their own cars, but Senior Connect does offer reimbursement of expenses such as gasoline.

As Megan looks back over her notes, she realizes that there are a lot of factors she needs to consider to determine if the Runners should continue to be classified as independent contractors. With expansion into a new city, she knows they need to decide before they begin to recruit new Runners. She decides to call a meeting of Senior Connect's leadership team to get some input on this important determination.

Question - Please do not use AI to answer these questions. Please use the textbook.

Question 1. Why did Senior Connect want to classify Runners as independent contractors?

Question 2. Do you think Senior Connect Runners should be classified as independent contractors or employees? Why?