Employment Benefits for Gig Workers: A New Approach to Recruitment

The “gig” or “sharing” economy is growing and companies must ask themselves what they can offer to attract the rising number of independent workers.

Many experts predict that by 2025 the majority of us will make our living this way.

Gig work offers flexibility, choice, control, and independence. But gig workers lack the benefits and social safety net that our regular W-2 employees have.

Companies must start rethinking benefits to find the best talent available in this new job market.

Health insurance for gig workers:

Health insurance is generally at the top of the list of desired benefits. However, putting a non-employee on a company’s health insurance plan is not a possibility.

One potential solution is to coordinate with a supplemental insurance company, such as Aflac, to offer additional coverage options.

Another possibility is to partner with an insurance broker who can help the worker navigate plan options to find the best one for them.

Clearly, neither of these ideas ideally solves the need for health insurance, but there are other concepts on the horizon as well.

Washington considering portable benefits for gig workers:

In Washington’s Legislature this year, House Bill 2109 was proposed to provide benefits to workers in the gig economy.

It would have required the businesses running the platforms (such as Uber) to contribute a certain amount of money to an account for each hour worked by the gig worker.

These accounts would be portable, meaning the worker could take them with them to any business they work for. The accounts would provide health insurance, paid time off, and retirement benefits. Workers would choose how to allocate their funds between the benefit options. Although the bill did not pass, we are likely to see legislation like it again in the future.

Portable benefits on a federal level:

On the federal level, Washington’s Representative Suzan DelBene has sponsored a bill to fund a $20 million Department of Labor grant to explore programs for state and local government and nonprofits to create pilot programs for portable benefits for gig workers.

Under this program, the benefits would include:

  • Health insurance
  • Retirement
  • Workers’ compensation
  • Life and disability insurance
  • Tuition reimbursement

Her co-sponsor in the Senate is Senator Mark Warren, who has long been working on solutions to provide benefits for workers in the gig economy.

Reclassification issues with gig workers:

Businesses hesitate to offer benefits to 1099 workers is the fear that this will cause them to be reclassified as W-2 employees.

For years we’ve been advised to be careful to treat them differently than we do our own staff. But as this trend continues, it only makes sense to find ways to ensure that these workers have access to the same benefits and safety net that others do.

Common sense ways to support gig workers:

Until better solutions are secured, there are a couple more common sense things we can do.

Treat all workers with respect, no matter where their paychecks come from: Gig workers have the right to work free of discrimination and harassment. They appreciate praise and feedback. They want to feel like they are making a meaningful contribution. Learn their names, ask about their weekend, and include them in casual social events.

Reward excellent performance: If an independent contractor finishes a project ahead of schedule and their work exceeds expectations, pay them a performance bonus! If they have a choice between working for you or someone else next time, no doubt that great worker will choose you.

Highlight opportunities for professional development: Everyone wants a chance to improve their skills in a competitive marketplace. Professional development is a benefit that most workers value. Consider how your gig might benefit the worker. Can they use a new software package, learn a new skill, or work in a new business sector? Since they make their living selling their abilities and experiences, you have the opportunity to help them build their resume.

Ask gig workers what they need:

Not sure the best approach to attract and retain the best gig worker? Just ask them what their needs and wants are!

It’s not going to be the same for everyone. But it might just turn out to be something pretty simple and easy for you to do. Perhaps a discount on your company’s products, some mentoring from a senior person in the company, or even a referral to another business that can also use their services.

The wrap-up:

The gig economy brings a whole new set of hurdles and opportunities for workers and businesses. We’ll benefit if we get ahead of the challenges by talking about the solutions together now!

Leave a Reply