We get asked this question all the time.
Gig work is a broad umbrella that includes any work an individual does outside of a traditional, long-term employer/employee relationship. The term “gig” originally came from musicians. Their pattern of working individual gigs for payment has developed into the massive gig economy we see today, where individuals work jobs for a variety of employers to make a living or as a “side hustle” to their regular job.
Some of the biggest changes to the industry came when gig work moved to the internet. Starting with Craigslist and Upwork, the internet has been connecting gig workers with jobs since the 1990s. When apps took over in the 2010s, the gig economy became mainstream.
One of the biggest challenges in defining gig work is how many different types of gig jobs there are. A gig economy worker can be a highly paid consultant who prefers who work for a variety of different companies, a part-time contractor who runs errands on weekends to make extra spending money or pay down debt, or W-2 temp worker (like our employees—learn more about the perks of working for Employbridge) who chooses new jobs every few months to gain a variety of experience for their resume.
Gig work isn’t all good or all bad. You just have to find the type of gig that works best for your needs and your lifestyle. Before starting your first gig economy job, here are a few things to keep in mind.
How gig workers are classified
The first thing to pay attention to when you’re deciding on a gig job is how that position is classified. A lot of gig economy jobs exclusively employ 1099 independent contractors.
1099 contractors file their own taxes, pay out-of-pocket for their own benefits, determine when and how they work, and even bring their own tools. Typically, they are paid based on the project they execute and have a contract for the work they do.
This type of work makes a lot of sense for consultants working on individual projects, like someone who is designing a company’s website or auditing their accounting processes. It’s also important to note that independent contractors usually do work that is “outside of the company’s usual course of business.” Basically, that means that they should be hired as temporary help to get a project completed, not the lifeblood of the company. This distinction is actually a really big deal right now in the state of California, where Assembly Bill 5, which was passed in 2019, is cracking down on companies like Uber and Lyft that misclassify their employees as contractors.
On the other hand, there are also gig work companies like Employbridge that classify their workers as W-2 employees. These workers are protected with basic things like workers’ comp, liability insurance, overtime, and unemployment insurance (contractors are not typically eligible to collect unemployment, though the Coronavirus Aid, Relief, and Economic Security (CARES Act) temporarily modified that law to help support all Americans during the COVID-19 pandemic).
Before starting work at a gig economy job, be sure to find out what type of worker you’ll be and how that will affect your lifestyle. If you choose to take a gig as a 1099 contractor, pay attention to how the taxes will impact you and save ahead of time so you aren’t hit with one big, unexpected bill at the end of the year. If you’re looking to work more than 40 hours per week, evaluate the difference overtime pay at a W-2 job can make for you. Regardless of what choice you make, it’s helpful to know you options and how they’ll impact your lifestyle before you start.
The pros and cons of gig work
The biggest perks of gig work are usually pretty clear - you have significantly more flexibility than the average worker. Instead of a typical 9-to-5 job, you as the worker have increased control over when you want to work. But this flexibility is dependent on the job.
If you sign a contract for a project that requires you to be in the office during typical hours, you’ve decided to do so. If you choose to work for a ride-sharing app, certain times of day (or days of the week) may have little to no demand, forcing you to work at peak hours to make money. If you work for a company like Employbridge that allows you to choose your own shifts, you have control over which shifts you want to work - but once you’ve picked them, employers expect you to show up on time and work the full shift. So your schedule is in your hands, but even with gig work, there are a few limitations.
The cons vary from platform to platform and company to company. What is true for one type of gig may not be true for another. But these are a few of the most common cons for gig workers.
For 1099 contractors, their tax status can be confusing and expensive. Especially for hourly jobs, workers can earn less than their W-2 counterparts when they are on the hook for their own taxes and benefits, and don’t receive the bulk discounts that employers get for when they insure their own W-2 workforces. These cons of 1099 status are part of why at Employbridge, we protect our entire workforce with W-2 status, protections, and benefits.
If you’re working as an individual who has a contract with a specific company, there can also be significantly less support as a gig worker. When you’re a contractor, the company can see you as means to an end—you’re here just to get the job done - rather than as part of their team. It can be worthwhile to be part of a larger team, like our crew at Employbridge, to ensure that your employer has your back. If you’re going solo, you’re on your own if something goes wrong.
What’s right for you?
The only way to know what’s right for you is to evaluate your needs. Ask yourself the following questions:
What kind of work do I want to do?
This is critical. If you don’t know what you want to do, how will you find gig work doing it? Start here, and once you know what your goals are, move on to the next question.
Do I want to find my own work, or do I want a platform to connect me with available jobs?
If you want to find your own jobs as a gig worker, you’ll need to build relationships with different companies to join as a consultant or contractor. Using a platform can make finding jobs much easier.
Is it important to me to be able to earn overtime pay?
Overtime is something that only exists for W-2 positions. If you’re ready to work above and beyond—more than 40 hours a week (or 8 hours a day, in some states)—you want to be properly compensated for your time and effort. Earning overtime pay can have a big financial impact, but isn’t an option to gig economy contractors.
How much flexibility do I need?
The amount of flexibility you’re looking for can help narrow down whether gig work is right for you and what type you’d like to do. If you want to be able to come and go as you please, it’s different from needing to be able to choose the shifts that work for your life.
Do I have the financial resources I need to be a 1099 independent contractor?
Take a look at your financial safety net and ask yourself the following: can I cover myself in the event of a workplace accident or unemployment, or would I rather be a W-2 employee with workers’ comp and unemployment insurance? Being a 1099 contractor comes with huge financial uncertainty for workers. Be careful about what you can and cannot afford if you decide to take that step.
Got a better idea of what you’re looking for? We hope so. If gig work could be right for you - but you’re looking for W-2 opportunities with short-term or long-term potential, check us out. Employbridge lets you pick the jobs and shifts that fit your life and your goals, all while protecting you with the W-2 benefits you deserve.
