NEWS28 October 2020

Insights Association asks for employment law change

Legal News North America

US – Market research industry body the Insights Association (IA) has called for the US government to specifically recognise research participants receiving incentives as independent contractors rather than employees.

US Congress

A letter to the Department of Labour from Howard Fienberg, vice-president of advocacy at the IA, says that the Fair Labour Standards Act 1938 should be altered to reflect that participants are not employees, and avoid potential legal challenges.

Research participants often get incentives to encourage them to join marketing research studies, based on the length, methods and circumstances of the project or the specialised knowledge, experience, demographics or background of the participant.

The IA letter says the 1938 act was based on “simplistic conceptions of work” and was not developed with market research in mind, and thus does not include clear guidance on the legal status of research participants.

Clarification is therefore required to ensure that research participants who receive incentives are not legally treated as employees, and instead as independent contractors.

The IA has therefore called for an addition to the 1938 act that emphasises that market research participants receiving incentives are independent contractors and not employees.

“While it might appear viscerally obvious that marketing research participants are not employees of companies or organisations conducting research studies, the firms that contract with these individuals face troubling challenges to that non-employee status,” the letter states.

“The cost of defending against these challenges and the uncertainty they create has a material negative effect on the industry. It also threatens the integrity of the research process and the resulting insights that people, companies, organisations and the governments rely upon every day to be able to learn and understand consumer attitude, behaviour and opinion.”

The Department of Labour is currently drawing up proposals to address the weaknesses in the 1938 act, and has proposed an economic realities test to determine if an individual is a contractor or employee.