Offering health, retirement, and workers’ compensation benefits to the varied gig workforce, while maintaining some affordability to the worker while also avoiding the 30 percent cost increase to businesses, has proven to be an extremely tall task. The situation gets even more complicated because gig businesses also need to be concerned that charges of worker misclassification could be supported by the offering of such benefits to their contractor workforce.
Of all the public policy debates surrounding the gig economy of late, one of the hottest topics has been “portable benefits” – the concept that gig economy workers should have flexible, portable benefits that they can take with them from job to job, or “gig to gig.” This push just got a major jumpstart that may turn out to be a game-changer.
As the proliferation of skilled contract workers continues, it is vital for companies to evaluate their strategies to attract and retain accomplished freelancers. Competition for skilled independent contractors is fiercer than ever as the gig economy allows just about everyone to run their own businesses, choose when to work, and carefully select which projects to accept. Because there are now dozens of platforms that allow freelancers to sell their own goods, sell space in their home, and market their skills, your organization is not alone in vying for their services.
Among my list of “must-read” workplace law summaries is the weekly “Punching In” column put out by Chris Opfer and Ben Penn over at Bloomberg Law’s Labor and Employment Blog every Monday morning. This week’s edition contains two pieces of interesting news for gig businesses. The first is a recap of the little-known provision in the tax reform bill that could provide as much as a 20 percent reduction off the taxable earnings of gig workers, which could funnel even more people into the pool of gig workers (and incentivize those already in the pool to stay there). We discussed this a few weeks ago; you can read about it in more detail here in this December 29 post.
In 2017, we saw how women across the globe have been using the gig economy as a means of gaining some financial independence. A recent report by the Overseas Development Institute even explored how the gig economy is benefiting Syrian women refugees in Jordan.
Meanwhile, women in the United States have also enjoyed earning money while balancing other responsibilities. In a study published last spring, Hyperwallet examined how American women were experiencing gig work, providing useful insight to gig companies on how they can attract, support, and retain female gig workers.
While the national debate rages on among policymakers, gig businesses, and worker advocates about whether and how to offer benefits to gig workers, some gig businesses are coming up with creative benefit offerings to meet at least some of the needs of gig workers.
There are obvious “benefits” to participating in the gig economy: Gig companies get to use as little or as much labor as they need. Gig workers are able to work at their chosen capacity. And customers get new products and services. But there are other “benefits” that are receiving more attention of late: “employee benefits.”
It is no secret that labor laws have been unable to keep pace with the changing economy. Recently, however, it appears the effort to spur change has been resuscitated, as proposals come in from the left (former SIEU head Andrew Stern) and the right (R Street Institute’s Eli Lehrer and Garret Watson), and pressure is applied from the bench (eastern Pennsylvania federal judge Hon. Michael Baylson).
Prior to the explosion of the gig economy, many workers sought fulltime, traditional employment options. Many of these individuals wanted a salary, benefits, and overall employment stability. Nowadays, however, many workers are reconsidering the traditional employment model. They enjoy the flexibility of the gig economy, which allows them to become entrepreneurs or to simply earn supplemental income. The gig economy has not only influenced workers, but businesses as well – and not just start-ups. Organizations have learned that using gig workers for specialized tasks can be a cost-effective solution. Sometimes gig workers are retained for simple projects, where simply completing the task is all that is necessary. However, for more complex jobs, the quality of the work completed is critical. This begs the question: how are businesses deciding who will handle these complex tasks, and how can you ensure quality work is being performed?
Should the legislative branch of the federal government focus its efforts on regulating the gig economy at the present time, or should they stick to bigger picture topics to occupy their time (such as healthcare or updating the federal tax code)? Should Congress step in and develop a system to provide employee benefits to gig workers? And the million dollar question: should our federal representatives take a stab at revising the independent contractor misclassification test to account for the changes in modern society brought about by the advent of gig work? Due to the growth and sheer breadth of the gig economy, these are but a few of the issues that need to be resolved.