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Elizabeth Warren On Rise Of The 1099 Economy: "A Real Problem"

The Democratic senator avoided directly answering whether Uber and Lyft drivers should be classified as employees, but did weigh in on the changing nature of contract workers.

Posted on May 26, 2015, at 10:59 p.m. ET

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Massachusetts Sen. Elizabeth Warren on Tuesday dodged addressing whether contract workers for on-demand services such as Uber and Lyft should be classified as employees, but did note that the "1099" IRS designation is being used in ways for which it was not intended.

Speaking at Re/code's Code Conference in Rancho Palos Verdes, California, Warren addressed a host of issues related to the changing economy and workforce in a wide-ranging interview with Re/code's Kara Swisher and Walt Mossberg. But in a follow-up question-and-answer session, the Democratic senator declined to directly address a BuzzFeed News reporter's question on how 1099 workers for on-demand services should be classified.

"I think there is evidence that increasingly employers use independent contractors not in ways that were originally intended, but in ways that let them treat employment laws differently than they otherwise would be responsible for," Warren said to BuzzFeed News. "I think that's a real problem and I think the Department of Labor is looking into this and I think they're right to do that."

The "1099 workers" are so named because of the IRS tax form they fill out for contract work at places like Uber and Lyft, as opposed to the traditional W-2 form for full-time employment.

Last week, a Florida agency ruled that an Uber driver should be classified as an employee and therefore be eligible for unemployment and other benefits. Meanwhile, Uber and Lyft are facing class-action lawsuits in California from drivers seeking classification as employees.

Given both the current lawsuits, and the rapid rise of the so-called 1099 economy to power on-demand services, the question promises to be a hot issue in an election year.

Excellent question from @mat about 1099 employees. I expect this will become an intense political battleground.

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