February 20, 2022

Classification Complications: Will Gig Workers Enter the Workers’ Comp Market?

It is almost impossible to find someone who has never used Lyft, Uber, DoorDash, Instacart, or any other on-demand, app-based service. Millions of Americans make up this still relatively new and non-traditional workforce, better known as the gig economy.

The gig economy doesn’t just include app-based workers. It can be characterized as an environment of short-term jobs or temporary contracts, which can also include freelancers, temp workers, contract workers, and other nontraditional work arrangements. Gig work durations can vary from a few minutes to over a year, and can include traditional labor such as manufacturing, IT jobs, retail, office work, and transportation.

But the question on everyone’s mind is this: are gig workers considered employees or independent contractors? This question of worker classification is crucial because employees are entitled to benefits such as workers’ comp, minimum wage, unemployment insurance, and more, while independent contractors are not.

There has been much regulatory rumbling around the question of worker classification, and while policy currently varies across the nation, if more gig workers are classified as employees, they will require workers’ comp insurance, which will expand the market. However, due to the non-traditional nature of gig work, designing coverage for these workers may be a new challenge.

How Big Is the Gig Economy?

Definitions of gig work vary, as does data collection, which impacts estimates regarding the size of the gig economy within the U.S.:

  • 21.4 million gig workers1 – Bureau of Labor Statistics
  • 16% of the population2 – National Bureau of Economic Research
  • 27-34 million gig workers3 – McKinsey & Company
  • 30%of adults do at least five hours of gig work a month4 – U.S. Federal Reserve
  • 40% of the American population5 – Government Accountability Office

Read the article in full online at RxInformer.

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