In recent years, an alternative to standard 40-hour-a-week jobs was introduced in the United States—the gig economy. Today, the gig economy is ingrained in American culture and touches almost every part of the standard U.S. citizen’s life.
What is the gig economy?
In an explicit definition, “Gig work involves activity where people earn income providing on-demand work, often through a digital service like an app” (Federal Trade Commission). Services like food delivery have grown the gig economy substantially, especially since the COVID-19 pandemic. Grocery delivery, transportation services, home repair, and even healthcare services are making their way into the gig economy as well. The FTC also states that “Sixteen percent of Americans report earning money through an online gig platform.” It is a significant part of the American economy.
Worker’s Rights Limitations Occurring in the Gig Economy
Unfortunately, being a gig worker often comes with complications. Full-time or even part-time employees sign contracts after being hired and work closely with human resources professionals to ensure their legal rights are being protected. It’s much more difficult to monitor these rights for gig workers. The FTC’s Policy Status Report details some of the issues gig workers might face, including:
- False schedule promotion – Gig services often promote working for their companies as an opportunity to have flexible working hours. But this isn’t always the case, and often leads to the misrepresentation of gig jobs as independent contractor jobs, which are different.
- Lack of information – As a gig worker, you don’t know beforehand which days and times work will be available, where the work will take place, or how you’ll be evaluated as a worker. This creates a huge power imbalance between companies and the gig workers they employ.
- Concentrated markets – When workers and consumers have little choice in gig opportunities, they can find themselves in tough situations while desperately trying to pay the bills.
Thankfully, the FTC is prioritizing these issues and seeking solutions for the problems facing gig workers.
The Growing Trend of the Gig Economy
Gig workers are becoming more and more common, as those with steady incomes look to increase their earnings in their down time and for those who need flexible working hours. In a thorough study, J.P. Morgan Chase concluded, “The Online Platform Economy is a crucial source of income for many families even after the shock of the pandemic. The continued rise of the Online Platform Economy raises the importance of strengthening the social safety net for contingent workers and reducing the administrative burdens associated with platform income.” Without sufficient protections for both gig workers and the companies that employ them, endless lawsuits would abound.
Finding Balance for Gig Workers
As the FTC creates policies to help gig workers, it is important for them to strive for balance. Companies need to grow without being hindered by regulations that are too limiting to allow success. Additionally, those who use gig work as a source of income need legal protections that keep them safe. The FTC’s policy priorities begin with a willingness to ensure correct categorization of employees. Companies must correctly classify whether their hires are independent contractors or gig workers. A failure to do so can result in heavy fines.
Many gig employees are unsure how their pay works. The FTC “has initiated rulemaking proceedings to strengthen its ability to detect and deter deceptive earnings claims and has sought comment on the prevalence of deceptive earning claims relating to gig work…Likewise, pursuant to the Franchise Rule or the Business Opportunity Rule, gig companies that require new participants to make required payments may need to disclose any claims they make about potential earnings and have a reasonable basis for, and written materials on hand to support, those claims.”
As the FTC continues to work on protecting gig workers, consider the implications of this growing section of the economy. Decide where the balance between company growth and worker protection lies for you in order to make informed opinions about the policies being introduced and continuing to gain leverage.