Gig work growth is up, but where are the benefits?
- Randstad Sourceright surveyed 700 HR leaders worldwide and found that 61% plan to convert a third of their full-time permanent positions into jobs for independent contractors, freelancers and temporary workers. Respondents said the job transformation allows them to be more agile in a growing gig economy and to find a solution to the talent scarcity problem.
- However, job transformation is raising questions about the lack of benefits, such as healthcare, workers' comp., and other protections for gig workers, National Public Radio (NPR) reports. Jessica Martinez, co-executive director of the National Council for Occupational Safety and Health, told NPR that gig workers hold some of the most dangerous jobs and need protective benefits, citing the accidental death of a food delivery worker for DoorDash.
- According to the National Employment Law Project (NELP), more than 129 million U.S. workers have worker's compensation coverage, says NPR. But because independent contractors don't generally have access to that benefit, the use of gig workers allows companies to keep labor costs low.
Lawmakers recognize the consequences that a massive expansion of the gig economy brings and the need to reform the Fair Labor Standards Act (FLSA), with its decades-old labor mandates, to give freelancers more protections. A bipartisan group of congressional leaders met earlier this year to consider providing gig workers with portable benefits such as healthcare, unemployment insurance, workers' compensation and retirement plans.
Democrats and Republicans have been debating how to update the FLSA and how to classify workers who fall in the gray areas between employees entitled to workplace benefits and independent worker status. Of late, lawmakers at the national level have been preoccupied with tax reform; therefore, attention to the gig economy might not resurface for a while. But the courts are also paying attention to these issues.
A report by MBO Partners predicts that 60% of the workforce will be independent professionals by 2027. The debates about benefits and worker classification are further complicated by reports that more older workers are not only joining the gig economy, but also leading it; according to a ManpowerGroup study, 94% of workers are open to non-traditional work arrangements. Although many gig workers are low-wage earners, higher-skilled, in-demand professionals can earn six-figure salaries.