By Anitra Johnson

Nurses using gig-work platforms like CareRev often face conflicting expectations, expected to follow hospital protocols like employees but lacking employee benefits and protections.

The classification of gig workers as independent contractors is legally complex, with factors like control over work, finances, and the nature of the relationship determining employment status.

Critics argue that classifying nurses as independent contractors creates a "race to the bottom" in wages and working conditions, potentially jeopardizing patient safety.

While some states have implemented specific regulations regarding independent contractors in healthcare, Delaware's stance remains unclear, leaving both hospitals and workers in uncertain legal territory.

When registered nurses Dariane Turner and Eva Hardy took jobs at Beebe Healthcare through the CareRev app in 2024, they expected the freedom of true independent contractors.

Instead, they found themselves in a gray area: They were required to follow hospital protocols like employees while losing basic workplace protections due to their contractor status.

Their experience reflects a controversial transformation in American health care, where hospitals are increasingly using gig-work platforms to staff their facilities. Although these apps classify nurses as independent contractors, the reality of their work often resembles that of traditional employees – raising legal and ethical questions.

Gig nursing disguised as independent contracting

CareRev bills itself as a health care “marketplace” that allows medical professionals to book per diem shifts at hospitals and clinics. The platform handles payments between workers and health care providers while classifying the nurses, technicians and therapists using its service as independent contractors. However, as Turner and Hardy discovered, the label doesn’t necessarily match the reality.

Unlike true independent contractors, who typically outline their services, set their schedules, and invoice clients directly, Turner and Hardy were assigned to specific areas by charge nurses, followed hospital protocols and reported to Beebe’s chain of command – all hallmarks of traditional employment.

"I'm not sure how we're 1099 because we don't have a lot of autonomy," Turner said. "We still have to do everything by Beebe's policies, procedures and their onboarding credentialing."

While CareRev provides contractors with a 1099 IRS form, the tax document alone does not define an independent contractor.

Class-action lawsuit claims worker misclassification at Beebe Healthcare

Days after Turner and Hardy were terminated for attendance, another former CareRev contractor filed a class-action lawsuit against Beebe Healthcare, accusing the organization of misclassifying workers as independent contractors to avoid paying overtime. The lawsuit, brought by registered nurse Rolande Chalmers, seeks unpaid wages and damages solely from Beebe.

CareRev’s contractor agreement prevents workers from suing the platform directly.

The lawsuit argues that Beebe hired Chalmers and other "Straight Time Workers" on a shift-by-shift basis but treated them like regular employees rather than independent contractors. It claims that Beebe controlled key aspects of their employment, including work assignments, tools and equipment.

Additionally, it argues that Beebe employs other registered nurses and patient care workers in similar roles but classifies them as employees, granting them the wages and benefits that Chalmers and others were denied.

According to the complaint, Chalmers and other affected workers had no ability to negotiate pay, subcontract their work or influence Beebe’s operational decisions. The lawsuit contends that their roles were essential to Beebe’s core function of providing healthcare, further challenging their classification as independent contractors.

Chalmers worked at Beebe before the tenures of former CareRev nurses Turner and Hardy. Although neither had a direct connection to Chalmers, both stated they had worked under the same conditions described in the lawsuit.

According to publicly filed court documents, the lawsuit has been sent to arbitration, which means a third party has been brought in to resolve the issue in a process outside of the courts.

Defining an independent contractor is complicated

Figuring out whether or not a worker should be classified as an employee of an organization is complicated. Delaware code does not define an "independent contractor," instead deferring to federal guidelines.

In federal law, the classification of "independent contractor" considers several factors in determining a worker's independence.

According to the IRS, independent contractor status depends on three key legal tests:

- Behavioral control: Who directs and controls the work?

- Financial control: Who manages payment, expenses and equipment?

- Type of relationship: Are the services essential to the business?

In March 2024, the federal Department of Labor updated regulations to emphasize how independent contractors should operate as truly distinct entities. However, some gig nursing platforms appear to be operating in direct tension with these guidelines.

Gig nursing: A race to the bottom

Gig nursing apps, once praised as an innovative fix for pandemic-era staffing crises, are now facing criticism as a potential "race to the bottom" in wage payment, staffing and patient care.

Even health care staffing platforms have raised concerns. One platform's blog, IntelyCare, advised employers about the risks of hiring nurses as independent contractors. The blog suggested that to avoid misclassification, employers should not provide contractors with an employee handbook or a name badge and exclude them from staff meetings and trainings, as these are indicators of an employer-employee relationship.

A report by the Roosevelt Institute, a think tank and nonprofit partner of the Franklin D. Roosevelt Presidential Library and Museum, argued this approach could also undermine patient safety by reducing accountability. It further noted that classifying health care workers as independent contractors excludes them from basic labor protections, such as minimum wage laws, workers' compensation and anti-discrimination safeguards.

These concerns are not hypothetical. On July 22, 2024, a federal court in Pennsylvania awarded $35.8 million in back wages and damages in one of the country’s largest wage theft rulings. The judgment found that the operators of 15 long-term care facilities willfully misclassified 6,000 workers as exempt to avoid paying overtime.

The legal gray area in Delaware

States have begun to grapple with the contradictions between the responsibilities of nursing and employment law regarding independent contractors, but responses vary widely.

In California, while physicians and other health care professionals can work as independent contractors, nurses cannot. Maryland has extended some discrimination protections to independent contractors. Delaware, where Beebe operates, has yet to clarify its position, leaving both health care facilities and workers in uncertain territory.

While Delaware law regulates staffing ratios and licensing for health care professionals, it remains unclear how independent contractors working through gig apps can comply with these rules, and what impact this may have on patient care.