Almost 40 million Americans work on a part-time or freelance basis and by 2020 half of the American workforce is expected to be part of this gig economy. This new workforce is full of challenges and benefits for both employers and employees. For employers looking to engage this new workforce there is a lot of legal compliance issues to consider, and for employees looking for freedom they look to be free of benefits as well.

1. The Future
Workforce
THE GIG ECONOMY AND THE CHALLENGES OF A
CONTINGENT WORKFORCE
©2018 | All rights reserved | Private and Confidential

2. 2
About the Speakers
Webinar Host
Brittany Kovalcik
Director of Marketing
EPAY Systems
Featured Speaker
Kevin M. Young
Partner
Seyfarth Shaw, LLP
Featured Speaker
Simon L. Yang
Senior Associate
Seyfarth Shaw LLP
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3. EPAY Systems Overview
CHICAGO BASED
TECH COMPANY
FOUNDED 2001
SERVING HOURLY
WORKFORCE
ENVIRONMENTS
PROVIDER OF COMPLETELY UNIFIED,
FULL SERVICE HCM SOLUTIONS
75,000+ WORKSITES
FREE PREMIUM CUSTOMER
SUPPORT
24 HOURS/DAY
7 DAYS/WEEK
365 DAYS/YEAR
INDUSTRY LEADER
UNIQUELY FLEXIBLE CLOUD
BASED TIME & LABOR
MANAGEMENT TECHNOLOGY
99%
CUSTOMER
RETENTION
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4. Legal Disclaimer
The contents of this presentation should not be construed as legal advice or a
legal opinion on any specific facts or circumstances.
These materials are intended for general information purposes only, and you are
urged to consult a lawyer concerning your own situation and any specific legal
questions you may have.
4WWW.EPAYSYSTEMS.COM

5. 5
• Overview of the Gig Economy
• Where the Gig Economy is
Headed
• Legal Risks for Employers
• Trends Among Lawmakers
• What’s Next
• Questions
Agenda
WHAT WE’LL
COVER IN TODAY’S
WEBINAR
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6. Tech Revolution is Here (Future of Workforce
Automation; Pew Research)
✓ 65% of Americans believe robots and computers are coming for
jobs
• Even higher percentage—80%—believe their job will remain
unchanged
• As many as 47% of all U.S. jobs at risk of “computerization”
• Expected 10% of retail space closing in coming years
6
What in the
World?
Impact on Jobs is Up For Debate
• Estimates of tech-related job loss over the next 20 years
range from 47% to 80%, but experts debate whether the
technology might create as many jobs
• Meanwhile, many industries, including manufacturing, are
facing skill gap crisis—e.g., estimated 2 million unfilled
manufacturing jobs by 2025
✓ Accelerating retirement rates
✓ Worker training not keeping up with advances in tech
✓ Millennial focus on freedom/purpose over profit—75% of workforce by
2025©2018 | All rights reserved | Private and Confidential

7. Automation of…What?
TASKS?
• 2016 McKinsey study found that of
830 jobs, only 5% could be fully
automated.
• But almost every job had some
aspect that could be automated.
• Even for a CEO, 25% of job prone
to automation.
OR JOBS?
• Jobs that lack judgment-based
skills or creativity may be prone to
complete automation.
• 2016 Obama White House report
estimated that 3.1 million drivers
could lose jobs to automation.
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8. What is the Gig Economy
8©2018 | All rights reserved | Private and Confidential
Sharing
Economy
Contingent Workforce
Economy
Online services
other than labor
(e.g., Airbnb)
Temporary
workers
Independent
contractors
Consultants
The Gig
Economy
(Human
Cloud /
On-Demand)
Credit: Crain Communications, Inc.
and Staffing Industry Analysts
Recent change/growth has focused on Human
Cloud/On-Demand—the portion of gig economy that is
part of sharing economy, which serves to optimize use
of otherwise underutilized assets.

9. • 2016 Deloitte study: (i) Over 40% of executives expect
increase in use of contingent workers in next 3-5 years;
and (ii) by 2020, 40% of workers will be freelancers
• Fastest growing industries in gig economy, per BLS:
arts/design; IT; construction; media/comms.; and
transportation/material moving
• Another study found that from 2005 to 2015, alternative
work arrangements accounted for 94% of net employment
growth in the U.S.
• Time Magazine reports that 42% of adult population has
used an on-demand service; 51% of workers offering on-
demand services are over 35; and 33% of those workers
work for more than one platform
• Seyfarth Future Employer Survey (2017):
o 51% believe future of work will bring massive change
o 58% believe talent management is biggest challenge for workforce
management
o 72% say automation/AI will reshape workforce
9
Where is
the Gig
Economy
Headed?
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©2018 | All rights reserved | Private and Confidential

10. What are the Benefits of ‘On-Demand’?
FOR THE WORKER
• Freedom of working
independently
• Convenience and flexibility
• Opportunity to work on different
projects, platforms
FOR THE EMPLOYER
• Easier access to talent pool
• Ability to focus on core
competencies
• Reduced up-front labor costs
• Flexibility in staffing, expanded
skills coverage
10©2018 | All rights reserved | Private and Confidential

11. What are the Risks?
FOR THE WORKER
• Lack of employment-based
benefits, safety net
• Reduced opportunity to hone
skills, train
• Head-on collision with AI, robots
FOR THE EMPLOYER
• Lack of control due to legal
constraints
• Limited ability to screen
• Lack of investment, continuity
• Legal risks due to novel issues
juxtaposed with archaic laws
11

12. • Issues related to mobility
• Issues related to remote work
• Issues related to on-call or waiting time
• Issues related to electronic
communications
• Recordkeeping
• Training to prevent discrimination,
harassment
• Qualification standards and inflexible leave
(incl. pregnancy accommodation)
• Joint employment (with client or with other
vendors)
• Privacy concerns
12
Legal Risks
for
Employers
©2018 | All rights reserved | Private and Confidential

13. Trends in the Courts
• Whether gig workers are employees or independent contractors continues to
be hotly litigated, but has resulted in little binding precedent, especially at
federal level
✓ Earlier this year, a California federal court ruled that Grub Hub driver did not meet
criteria to be “employee” under California Labor Law
✓ More on that in the next slide…
✓ No other federal court has definitely ruled on whether gig worker qualifies as
“employee” under FLSA, ADA, FMLA, or Title VII
✓ Many gig cases resolved through mandatory arbitration, and those permitted to
proceed in court typically settle
• Definitive, but conflicting, rulings have come out of a few state courts
answering classification question in context of unemployment eligibility:
✓ In February 2017, a Florida appellate court upheld ruling by state revenue agency
that Uber drivers were independent contractors and thus ineligible
✓ In June 2017, a New York administrative law judge upheld NYDOL ruling that a select
number of Uber drivers were employees
13©2018 | All rights reserved | Private and Confidential

14. Misclassification Consequences
#1 in 2017: April 2017 – $227 million settlement with 12,000 drivers in 20
states alleging wage and hour violations for misclassification as
independent contractors
#1 in 2016: June 2016 – $226 million settlement with California drivers
alleging wage and hour violations for misclassification of drivers as
independent contractors
#2 in 2016: April 2016 – Up to $100 million settlement with class of CA
and MA drivers
#4 in 2017: March 2017 – $27 million settlement with California drivers
alleging wage and hour violations for misclassification as independent
contractors
14

15. • Joint employer liability?
• FMLA eligibility tied to history as
employee?
• Worker’s comp benefits?
• Right to collectively bargain?
• Employer provided retirement benefits?
• Employer provided health benefits?
• Federal, state, and local discrimination
laws?
• Employer’s share of payroll taxes?
15
Other Consequences

16. • The legislative ideas with most traction at all
levels work within binary,
employee/contractor classification system
• Under most proposals, workers have new
opportunities to access some benefits of
traditional employment without being swept
under the broader protections of existing
employment laws
• Two notable proposals are quasi-unions and
portable benefits
• Outside-the-box thinkers have considered
third category—Dependent Contractor—
similar to concept embraced in Canada and
various European countries
16
Trends
Among
Lawmakers
©2018 | All rights reserved | Private and Confidential

17. 17
What’s
Next?
Where?
• City/county level
• State level (incl.
agencies)
• Federal level (incl.
agencies)
• The courts
What?
• Right to organize
• Classification for wage
purposes
• Classification for tax
purposes
• Benefits
• Restrictive covenants
When/how?
• Litigation
• Amici brief
• Opinion letters
• Legislative
involvement
©2018 | All rights reserved | Private and Confidential

18. A Plan from the New Administration
18
Nov. 7, 2017
House of representatives
approves Save Local
Business Act to address
joint employer standards
Dec. 14, 2017
NLRB decision overturns
Browning-Ferris and
requires direct control for
joint employer status
June 7, 2017
DOL withdraws 2016
guidance re: joint
employer and
independent contractor
status
Springboard for new federal workplace laws for contingent workers?
• Oct. 2017: Acosta expresses support for overhauling laws to account for gig economy
and evolving relationship between workers/employers
• Feb. 2018: Senate HELP Hearing on the gig economy
• June 2018: DOL updates 2005 BLS Contingent Worker Survey
• Throughout this time, legislation being proposed to clarify retiree benefits,
contractor/employee definition.
©2018 | All rights reserved | Private and Confidential

19. ✓Washington State
✓New Jersey
Independent Contractor with benefits
✓Seattle, Washington
Independent Contractor with organizing
rights
✓Arizona Marketplace Exemption
State Law Statutory Non-Employees
19
Clarity at State Level

20. Challenges and Opportunities
CHALLENGES
• Look like type of “employer” next
wave of talent wants to work with
(e.g., tech)
• Hands-off experience some want
while preserving quality, brand,
and sufficient control
• Where to re-focus traditional
efforts, where to focus change?
OPPORTUNITIES
• Gap filling for training and skills.
• Gap filling for benefits.
• Stability of a traditional job with
nimbleness of a temporary
assignment
• Screening function for clients
• Other risk reduction for clients
20

21. 21
Pre-Hire to Retire:
One Seamless Platform
ACATAX MANAGEMENT ANCILLARY SERVICESPAYROLL OUTSOURCING
DELIVERED AS A SERVICE
CLOUD-BASED SOFTWARE
APPLICANT
TRACKING
BENEFITS
ADMINISTRATION
HUMAN RESOURCES
MANAGEMENT
PAYROLL & TAX
MANAGEMENT
TIME & LABOR
MANAGEMENT
SELF SERVICEMOBILE ANALYTICSREPORTING
PERFORMANCE
MANAGEMENT
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22. Mitigate Compliance
Risk
Effectively manage ACA/OSHA/EEO/FLSA/COBRA and get
insight into employee activity
Get the business intelligence and reporting you need
for constantly changing government regulations
Unify pay practices and rates across your
organization
Automate the processing of federal/state tax and pre-
employment forms
GATHER EMPLOYEE DATA
NEEDED TO ANALYZE YOUR
COMPANY’S COMPLIANCE
Ensure
Consistency
Across Your
Organization
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23. 23
• Integration with
leading job
boards
• Unlimited users
with full system
access
• Screening q’s,
keywords,
applicant tagging
• Video
interviewing
• Email and SMS
messaging and
templates
• Mobile
• Spanish
applications
APPLICANT
TRACKING
• Plan
administration
• Open enrollment
• COBRA
management
• ACA compliance
reporting
• Carrier Connect
(data feeds)
• 401K file feed
BENEFITS
ADMINISTRATION
• Complete payroll
and tax
processing
• Accommodation
of multiple
FEINs, states
and localities
• Garnishment
processing
• Year-end tax
filing
• New hire
reporting
• Free pay card
program
PAYROLL & TAX
MANAGEMENT
• Flexible pay
rules
• Scheduling
• Accruals
• Budgets &
job costing
• Workforce
analytics
• Wage & hour
compliance
• Mix & match
time
collection
options
TIME & LABOR
MANAGEMENT
• New hire
onboarding with
electronic I-9 and
e-verify
• Skills, education
& performance
tracking
• Employee &
manager self-
service
• Document & task
management
• OSHA, EEO &
Workers’ Comp
reporting
HUMAN RESOURCES
MANAGEMENT
PERFORMANCE
MANAGEMENT
• Automated
performance
and self-
reviews
• 360 degree
surveys
• Compensation
dashboard
• Learning
content
integration
• Goal
management
• Statistics
dashboard
• JournalingStandard Reports and Custom Reporting Tool
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24. Questions?
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25. 25
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Us on Social
Media
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Take the survey
Request a demo EPAY HCM & TLM
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Website
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26. Thank you!
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