A rather large elephant has waddled in and sat down in the middle of the working world. It has spent the last few years making its way toward that space, either unnoticed or studiously ignored by employers and lawmakers alike.
This elephant represents the fast-growing population that works as freelancers or independent contractors in what is now known as the gig economy. Their existence has huge implications on EHS policies, legalities, financial and employment obligations, and general agreements as to who is responsible for what in terms of people who work for a company without officially being part of it.
One of the outcomes of the internet age is that many types of work no longer need to be housed inside a dedicated building belonging to an employer. For much of the twentieth century, people went to workplaces because that’s where the work was: in the offices, in boardrooms, and on factory floors. Even people who spent most of their time on the road, like sales reps and truck drivers, still reported back to the home office to get their assignments and receive their pay.
The advent of connected computer technologies in the 1990s automated tasks previously performed by humans on an unprecedented scale. Travel booking apps like Trivago and Kayak, for example, have decimated the travel agency industry. These technologies were and still are a boon to companies everywhere who can successfully maximize profits while minimizing costs - including the direct and indirect costs of labor.
The other side of this coin, however, is that these same technologies have ushered in jobs and businesses that were unheard of in the pre-internet era, and have also empowered people to pursue their careers, or new ones, with those same technologies helping them with bookkeeping, advertising, networking, research, education, and communication.
This has given rise to the gig economy. The term "freelancer" has a storied history, but in the twentieth century, freelancers were always looked upon as "not really employed." They were seen as flighty artists, musicians, writers, and others who could not hold down a real job. This kind of bias still exists today, as any freelancer who has tried to obtain a mortgage will tell you.
This second decade of the twenty-first century will see the gig economy rise to become a significant force in industries of all types. The World Economic Forum predicts that within ten years, up to 50% of the U.S. workforce will be freelancers, again fueled by companies seeking to minimize costs and individuals armed with the technologies to independently deliver a full business offering.
The demographics of self-employed entrepreneurs cuts across all sectors of the economy, from the youngest social media professionals to senior executives who are seeing the average tenure of an executive position drop to about five years.
Who Pays for Safety?
Smashing the workforce into a cloud of orbiting freelancers might offer freedom to companies and individuals, but it loses sight of some of the ancillary but necessary elements of belonging to a group. Many of these elements took centuries of struggle to establish - for example, safety training and legislation, benefits, sick pay, group insurance, pensions and retirement plans, and overall economic credibility.
Recent case studies and lawsuits involving Uber, Lyft, trucking companies, and others reveal the complexities involved in identifying just when and how a worker can be considered “a worker” in terms of qualifying for benefits and on-the-job protection. In many cases, these types of employers expect or assume that contract workers “receive employer-sponsored health insurance through a different employer, or through a spouse, or other family member.”
(Find out Who Pays for Personal Protective Equipment.)
In 2019, California Assembly Bill 5 (AB 5) upheld a California Supreme Court case that found most workers were to be seen as “employees,” and that the burden of proof for classifying individuals as independent contractors belonged to the hiring entity. This law represents a small localized step toward defining gig economy employees as deserving of protections, and despite the state’s substantial economy, many challenges remain, especially considering that not all contract workers who work with California companies are resident in that state.
An Employer Is Still an Employer
The question of responsibility for protecting contract workers at a worksite is not a new one, of course. But the growing proportion of gig economy workers in all sectors and across economic and territorial boundaries begs the question as to who should now establish these protections and policies.
Naim Murray-Sheridan of Brodies LLP, a Scottish headquartered law firm, identifies how the risks shouldered by gig economy employees range from inadequate training to excessive time pressure, forcing them to take safety shortcuts just to make ends meet. She writes, “the primary duty [of responsibility] lies with the person or organization who has control of the premises or environment where the worker operates.” Although this may have traditionally focused on a physical place of business, she adds, “enforcement bodies and the courts will look beyond the labels given to relationships and examine the realities of the relationship.”
The coming decade will see a continued expansion of borderless work transactions paired with a parallel increase in small business and self-employed professionals. This will lead to a growing need for recognition and legitimization of freelancers’ existence as part of the global economy. Establishing protections for those workers will become more urgent than ever.