While the on-demand society and the companies who hire freelancers have been growing rapidly over these past few years, it hasn’t been without controversy. The flexibility of being an independent contractor has it’s perks. However, one of the biggest drawbacks is the lack of benefits but most freelancers need it.
The upside of hiring an independent contractor is quite clear to an employer: the cost benefits. While the lifespan of employment is generally shorter, an employer can save significantly on costs such as health benefits, as opposed to a full-time position. But that raises the question: is that ethical? Or legal? There’s a very fine line by law when it comes to employee benefits and this concern is being brought up more than ever. In fact, it was brought up at a recent GOP debate when Carly Fiorina was asked about the growing number of workers who do not have a 401k or employer-sponsored retirement plan. Not surprisingly, she skirted around the subject. The matter of benefits for the on-demand workforce is a sleeping giant that seemingly no one wants to deal with. But the firestorm it can create is already apparent.
Many leaders of companies in the sharing economy are beginning to address this problem as they realize that this could snowball into longer term difficulties for the on-demand workforce and the employers who hire them if left unaddressed. A group of tech leaders, many from on-demand companies such as Handy, Instacart, and Care.com, have posted a letter on the website Medium calling for lawmakers to address the need of protection and benefits for this workforce. At the core of their campaign is bringing to light a freelancer’s plight – their work is nimble and unpredictable and they need a basic protections to cover them. This campaign and many others similar to it take aim at companies like AirBnb and Uber, two pioneers of the on-demand economy who have been widely criticized for their lack of employee support. While they are now launching campaigns to for legislation to provide independent contractors with support, they want to protect their own business model at the same time.
Change is still far away and slowly coming but the need to address this problem has been noticed. The on-demand workforce has become a very significant part of the American economy and the new way in which it works. In order for it to continue to not only sustain itself and grow, this workforce needs to be supported in one way or another.