Gig worker

Gig workers are independent contractors, online platform workers,[1] contract firm workers, on-call workers[2] and temporary workers.[3] Gig workers enter into formal agreements with on-demand companies to provide services to the company's clients.[4]

Background

In the 2000s, the digitalization of the economy and industry was carried out rapidly due to the development of information and communication technologies such as the Internet and the popularization of smartphones.[5] As a result, on-demand platforms based on digital technology have created jobs and employment forms that are differentiated from existing offline transactions by the level of accessibility, convenience and price competitiveness.[5] In general, "work" is described as a full-time worker with set working hours, including benefits.[6] But the definition of work began to change with changing economic conditions and continued technological advances, and the change in the economy created a new labor force characterized by independent and contractual labor, such as well.[6]

Present conditions

36% of U.S. workers join in the gig economy through either their primary or secondary jobs.[7] The number of people working in major economies is generally less than 10 percent of the economically viable population, according In Europe, 9.7 percent of adults from 14 EU countries participated in the gig economy in 2017, according to the survey. Meanwhile, it is estimated that gig worker's size, which covers independent or non-conventional workers, is 20% to 30% of the economically active population in the United States and Europe.[5]

Difference from temporary workers

Many factors go into a desirable job, and the best employers focus on the aspects of work that are most attractive to today's increasingly competitive and fluid labor force.[7] Traditional workers have long term employer- employee relationship in which the worker is paid by the hour or year, earning a wage or salary. Outside of that arrangement, work tends to be temporary or project-based workers are hired to complete a particular task or for certain period of time.[8] Coordination of jobs through an on-demand company reduces entry and operating costs for providers and allows workers' participation to be more transitory in gig markets (i.e., they have greater flexibility around work hours).[4] Freelancers sell their skills to maximize their freedom, while full-time gig workers leverage platforms to level up their skills.[9]

Employment models

The business model of companies situated in the gig economy has been criticised for using technology to evade worker protections such as rights to minimum wages and paid leave and disguising employment relationships as independent contracting/self employment in order to shift costs onto workers. For example, a study by the Centre for Future Work at the Australia Institute accused Uber of "creatively leveraging the advantages of its dispatch system in order to evade traditional labour regulations (and other inconvenient taxes and regulations)".[10] While in traditional industries, workers may enjoy the benefits of trade unions, healthcare provision, minimum wage, contract termination and working hours rights, employees within the sharing economy are often paid as freelancers. Freelancers do not receive pension benefits or other employee rights and benefits and are often not paid on an hourly basis.

A 2016 study by the McKinsey Global Institute concluded that, across America and England, there were a total of 162 million people that were involved in some type of independent work.[11] Moreover, their payment is linked to the gigs they perform, which could be deliveries, rentals or other services.[12]

In some jurisdictions, legal rulings have classified full-time freelancers working for a single main employer of the gig economy as workers and awarded them regular worker rights and protection. An example is the October 2016 ruling against Uber in the case of Uber BV v Aslam, which supported the claim of two Uber drivers to be classified as workers and to receive the related worker rights and benefits.[13]

It is important to distinguish employment in the sharing economy from employment through zero-hour contracts, a term primarily used in the United Kingdom. Employment in the gig economy entails receiving compensation for one key performance indicator, which, for example, is defined as parcels delivered or taxi lifts conducted. Another feature is that employees can opt to refuse taking an order. Although employers do not have to guarantee employment or employees can also refuse to take an order under a zero-hour contract, workers under such a contract are paid by the hour and not directly through business-related indicators as in the case of the gig economy.[14]

Advantages and disadvantages

Gig workers have high levels of flexibility, autonomy, task variety and complexity.[15]

But the gig economy has also raised some concerns. First, these jobs generally confer few employer-provided benefits and workplace protections.[6] Second, technological developments occurring in the workplace have come to blur the legal definitions of the terms "employee" and "employer” in ways that were unimaginable when employment regulations in the United States like the Wagner Act of 1935 and the Fair Labor Standards Act of 1938 were written.[6] These mechanisms of control can result in low pay, social isolation, working unsocial and irregular hours, overwork, sleep deprivation and exhaustion.[16]

Tax implications

For independent contractors, payroll taxes and withholding taxes are not deducted, and neither party is covered by the same rules and regulations that apply to traditional employees. However, independent contractors must still pay self-employment taxes and quarterly estimated taxes.[8]

Future

Measuring the size of the gig workforce is difficult because of the different definitions of what constitutes "gig work"; limitations in the methods used to collect data via household surveys versus information from business establishments; and differing legal definitions of workers under tax, workplace, and other public policies.[17] Evidence suggests that over the last 20 years, the number of people working at gig work has been increasing.[18]

Continued advances in technology have the potential to increase gig work activity. Online technology has enabled new forms of work with the potential to further change the Gig economy.

Most importantly, gig work's appearance is not an isolated trend, but is related to wide changes in the economy. Advances in globalization and technology put pressure on companies to respond quickly to market changes. Securing labor through nontraditional agreements such as gig work will enable companies to quickly adjust the size of their workforce. This can help companies increase their profits. From this point of view, the unconventional gig work is a fundamental component of today's economy, and it is unlikely to disappear anytime soon.[19]

Gig workers can be found on all levels of an organization, including top executives such as CEOs, CFOs, CROs, and VPs – typically referred to as interim or fractional executives.

By location

Europe

When it comes to platform workers in Europe, there are significant differences across countries. The UK has the highest incidence of platform work. Other countries with high relative values are Germany, the Netherlands, Spain, Portugal and Italy. By contrast, Finland, Sweden, France, Hungary and Slovakia show very low values compared to the rest.  The typical European platform worker is a young male. A typical platform worker is likely to have a family and kids, and regardless of age, platform workers tend to have fewer years of labour market experience than the average worker. The majority of platform workers provide more than one type of service and are active on two or more platforms. While flexibility and autonomy are frequently mentioned motivations for platform workers, so too is the lack of alternatives. One controversial issue, though not unique to Europe, is the employment status of platform workers. When asked about their current employment situation, 75.7% of platform workers claimed to be an employee (68.1%) or self-employed (7.6%). The labour market status of platform workers is unclear, workers themselves are unsure and it also reflects uncertainty surrounding this issue in policy and legal debates around Europe. While platform work can lower the entry barriers to the labour market and facilitate work participation through better matching procedures and easing the working conditions of specific groups, this type of work often relies on a workforce of independent contractors whose conditions of employment, representation and social protection are unclear and often unfavourable. The status of platform workers is probably the most complex policy issue in the era of platform work. [20]

South Korea

Gig work is spreading around the side job and delivery business. Kakao has hired drivers to build a system for proxy driving, and the people of delivery are meeting the surging demand for delivery through a near-field delivery called "Vamin Connect". There is a gig work platform for professional freelancers, not just work. The platform, which connects those who want skilled professionals and those with skills, offers 10 kinds of services, including design, marketing, computer programming, translation, document writing and lessons. However, "gig worker" is not yet very welcome in Korea. This is because many "gig workers" have conflicts with existing services and expose the lack of social and legal preparation.[21]

United States

In 2015 nearly one-in-ten Americans (8%) have earned money using digital platforms to take on a job or task. Meanwhile, nearly one-in-five Americans (18%) have earned money by selling something online, while 1% have rented out their properties on a home-sharing site. Adding up everyone who has performed at least one of these three activities, some 24% of American adults have earned money in the "platform economy" in 2015.[22]

Tax issues

In contrast to contractors, employees receive W-2 forms from their employers, who are obligated to provide them certain benefits, to deduct payroll taxes, and are covered by minimum wage and anti-discrimination laws. In many cases, temp-agency and subcontracted work is W-2 work, but the W-2 is issued by the contracting company rather than the company where the worker reports to work.[8]

United Kingdom

The UK Supreme Court provided guidance on the correct way to categorize "gig economy" workers. Pimlico Plumbers lost an appeal that one of its plumbers was a "worker", i.e. an employee, not a self-employed independent contractor.[23] The UK Employment Appeals Tribunal ruled that Hermes couriers are "workers" with certain statutory benefits including minimum wage, rest periods and holiday pay.[24] In 2018 Uber lost a court case which claimed drivers are workers and therefore entitled to workers' rights including the national minimum wage and paid holiday.[25] As of November 2020, this is still under review.[26] Many "gig economy workers" have not been able to receive Coronavirus support funding.[27]

See also

References
  1. Vallas, Steven; Schor, Juliet B. (2020). "What Do Platforms Do? Understanding the Gig Economy". Annual Review of Sociology. 46 (1): annurev–soc–121919-054857. doi:10.1146/annurev-soc-121919-054857. ISSN 0360-0572.
  2. Russel, Lia (16 January 2019). "The Silicon Valley Economy Is Here. And It's a Nightmare". Retrieved 19 January 2020. Many of those new low- and middle-income earners appear to be gig workers. Projections from the state Employment Development Department found that the fastest-growing occupations in San Francisco were taxi drivers, chauffeurs, couriers, messengers, and personal care aides. Exact numbers are hard to come by, because gig workers are often considered self-employed—and that very opacity plays into the hands of tech companies that aren’t particularly keen to shine a light on whether these new jobs meet fair labor practices.
  3. Alvarez, Matt. "5 Things You Need to Know About the Gig Economy". gigworx.com.
  4. Donovan, Sarah; Bradley, David; Shimabukuru, Jon. "What Does the Gig Economy Mean for Workers?". Cornell University ILR School.
  5. Choi, Gisan (January 2019). "Global Gig Economy Status and Implications". International Economy Focus (in Korean).
  6. Dokko, Jane; Mumford, Megan (December 9, 2015). "Workers and the Online Gig Economy". The Hamilton Project.
  7. Pendell, Ryan; Mcfeely, Shane (August 16, 2018). "What Workplace Leaders Can Learn From the Real Gig Economy". Gallup.
  8. "What is a gig worker?". gigeconomydata.org.
  9. Hagan, Jean (September 2016). "IFTF: Voices of Workable Futures". Institute For The Future.
  10. Jim Stanford. Subsidising Billionaires: Simulating the Net Incomes of UberX Drivers in Australia. Australia Institute. 2018.
  11. "Independent work: Choice, necessity, and the gig economy". McKinsey & Company.
  12. Wilson, Bill (February 10, 2017). "What is the 'gig' economy?". BBC News.
  13. Gingell, Matt. "Gig economy: How workers' rights may be about to change".
  14. "Distinguishing employment under zero-hour contracts and the gig economy".
  15. Woodcock, Jamie (2019). The gig economy : a critical introduction. London: Polity Press. ISBN 978-1-509-53636-8.
  16. Wood, Alex; Graham, Mark (August 8, 2018). "Good Gig, Bad Gig: Autonomy and Algorithmic Control in the Global Gig Economy". Work, Employment and Society. 33 (1): 56–75. doi:10.1177/0950017018785616. PMC 6380453. PMID 30886460.
  17. Weil, David (Dec 2019). "Understanding the Present and Future of Work in the Fissured Workplace Context". RSF: The Russell Sage Foundation to the Social Sciences. 5 (5): 147–165. doi:10.7758/rsf.2019.5.5.08. S2CID 211388126.
  18. "Freelancing in America: 2017" (PDF). Upwork and Freelancers Union. Edelman Intelligence. 2017.
  19. Weil, David (Dec 2019). "Understanding the Present and Future of Work in the Fissured Workplace Context". RSF: The Russell Sage Foundation to the Social Sciences. 5 (5): 147–165. doi:10.7758/rsf.2019.5.5.08. S2CID 211388126.
  20. Pesole, A., Urzí Brancati, M.C, Fernández-Macías, E., Biagi, F., González Vázquez, I. "Platform Workers in Europe" (PDF). JRS Policy for Science Report.CS1 maint: multiple names: authors list (link)
  21. "'새벽배송' 그것이 뭐시 문젠디!?···새로운 근로 패러다임, '긱 워커'와 '플랫폼 워커'가 뜬다" [What's Dawn Delivery? A New Work Paradigm, Gig Worker and Platform Worker is a Rising Sun]. Pressman (in Korean). 2019-04-02.
  22. Aaron, Smith (2016-11-17). "The Gig Economy: Work, Online Selling and Home Sharing". Pew Research Center: Internet, Science & Tech.
  23. https://www.lexology.com/library/detail.aspx?g=9cad8283-99c0-4de4-9e63-b99e8d518217
  24. https://www.algoodbody.com/insights-publications/false-self-employment-and-the-gig-economy-where-are-we-now
  25. https://www.theguardian.com/technology/2018/dec/19/uber-loses-appeal-over-driver-employment-rights
  26. https://www.theguardian.com/technology/2020/jul/21/uber-drivers-fight-for-workers-rights-reaches-supreme-court
  27. https://www.bbc.com/news/uk-wales-52807979
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