A continuous divide between whether a gig worker is in employee or an independent worker is expected to continue for some time.
Traditionally the most common form of work has been the employee-employer relationship.
That changed when people started being independent contractors and the 1099 model came into being. The entire intent of someone being a independent contractor means they are self-employed. They’re free to work when they want on their own schedule and and they are responsible to deliver the goals and objectives that they subscribe to as part of the contract they sign with their client. While an independent contractor gains these flexibilities, they give up certain protections such as health insurance, paid time off, workers compensation and other benefits.
However technology based employment has changed things in an extremely accelerated manner. There was practically no gig working before the likes of Uber. And we all know the pace at which gig work has expanded over the last almost two decades is anything but ordinary.
I have read a variety of forecasts projecting upwards of 51% of the US workforce being independent workers in literally the next decade or two.
A gig worker as originally intended was an individual who could use their skills or things to offer services on a part-time basis. This record the sharing economy. Over the last few years, this definition has completely changed. A large percent of our workforce has now become a full-time gig worker. And that is where lies the conundrum.
This calls for a significant shift not just in how we see the gig economy but also how this form of independent work is structured.
A gig worker is an evolved form of a contractor. Now there are two types of contractors.,.
1. People who step away from having a full-time employment because they wish for greater autonomy and flexibility in their lives. In most cases these individuals possess skills that are in high demand.
2. The other category of individuals are the ones who we traditionally called gig workers. These individuals are finding temporary employment through technology-based platforms. Not all gig workers are working full-time on gig platforms. There are a lot of people within that gig worker pool who are working only because the either have an interest or have available time and skills that they wish to monetize.
Traditionally anyone who’s working as an independent fails to receive the protections (health insurance, paid time off, accrued benefits etc) that are typically offered by employers to an employee. The reason employers cannot offer these benefits to independent contractors is because by law these benefits are limited only to those who satisfy the employer employee relationship test. By offering such benefits to contractors their tax classification comes into question.
While there maybe some independent contractors who work full-time on these gig platforms, they are not necessarily tied to any one platform. Mostly, they multitask between multiple platforms. And most of them prefer having the flexibility of clocking in and clocking out at will and on their own schedule. Such privileges are not available to an employee.
For the system to truly evolve and grow, how gig work is structured will change significantly from how it is done today.
Large organizations that rely on armies of gig workers to enable the services they offer will need to find a middle ground of providing protections to the gig workers. Why they may continue to be classified as an independent contractor, the legal framework will need to evolve to produce a structure where benefits can be provided to independent contractors without having them to be treated legally as employees.