What is the “gig” economy and how does it affect the benefits world? If you have ever used Uber or Airbnb, they you have participated in the gig economy which is estimated to include over 600,000 workers and is expected to grow exponentially. A Kansas based lawyer offers insights into this new world and how employers might be affected.
For those old enough to remember, a gig gained referred to a performance by a musician. The gig worker is certainly not like a full-time or even part-time employee who works for one company but they are also not like a freelancer or independent contractor either. Why? Because in the gig economy, there’s an intermediary like Uber facilitated by technology who:
- Takes a percentage of the fee
- Controls the brand
- Controls the relationship with the client
There’s been some litigation by gig workers about fair wages and the DOL has issued interpretations but the effect on benefits comes down to the definition of what constitutes an employee which in turn affects benefits.
The government, both state and federal, are concerned about providing more workers with access to retirement at work where people are more likely to save. Gig companies are in a position to act as intermediaries for benefits to leverage the pool of assets and workers. Costs are relatively low if the workers pay most if not all of the fees – there’s no shortage of robo-record keepers, advisors and benefit brokers.
So if you’re wondering why or how this could affect your company, is it farfetched to think that part of the services you offer or products you make will be outsourced to gig workers? And if so, like with temp workers, how will you handle benefits? Welcome to the new world of the gig economy!