How Policymakers Can Help Workers in the On-Demand, Gig Economy

Posted September 1, 2020
By the Annie E. Casey Foundation
An on-demand worker delivers product for customer

On-demand work­ers — also referred to as gig or free­lance work­ers — face many chal­lenges, includ­ing a lack of legal pro­tec­tions and bar­ri­ers to edu­ca­tion and train­ing that would help them gain more tra­di­tion­al, full-time jobs, accord­ing to a white paper fund­ed by the Annie E. Casey Foundation.

State pol­i­cy­mak­ers and oth­er gov­ern­ment lead­ers can do much to help these on-demand work­ers — defined broad­ly in the report to include a range of roles from day labor­ers to var­i­ous inde­pen­dent con­trac­tors — espe­cial­ly as the COVID-19 pan­dem­ic affects many of their roles, the report says.

A grow­ing sec­tor pos­ing chal­lenges for workers

Most sur­veys esti­mate that, each year, one in three Amer­i­can adults per­form on-demand work, with about one in 10 using such oppor­tu­ni­ties as their pri­ma­ry sources of income, accord­ing to the report, pro­duced by the Nation­al Gov­er­nors Asso­ci­a­tion Cen­ter for Best Prac­tices and Insti­tute for Work & the Econ­o­my. Data sug­gests that gig work is grow­ing, too.

Among oth­er chal­lenges they expe­ri­ence, on-demand work­ers are:

  • often not cov­ered by min­i­mum wage laws or the same work­place safe­ty reg­u­la­tions, state work­ers’ com­pen­sa­tion sys­tems and oth­er pro­tec­tions tied to full-time employment;
  • often not in a posi­tion to con­trol their sched­ules — not qual­i­fy­ing for over­time but need­ing to work more than 40 hours a week to pro­vide for themselves;
  • less like­ly to have a bachelor’s degree or to have access to ben­e­fits such as paid time off or health insur­ance com­pared to peo­ple with more tra­di­tion­al, full-time jobs; and
  • increas­ing­ly bear­ing the costs of train­ing and edu­ca­tion, as employ­ers reduce invest­ments in these areas.

The COVID-19 pan­dem­ic under­scores the need to exam­ine the oppor­tu­ni­ties and chal­lenges fac­ing on-demand work­ers, as many find them­selves either out of work or fill­ing front­line roles, such as food deliv­ery dri­vers or emer­gency child­care providers, the pub­li­ca­tion says.

With the cur­rent pub­lic-health cri­sis, new mea­sures to help gig work­ers — many of whom are young peo­ple of col­or — are more urgent than ever,” says Alli­son Ger­ber, a senior asso­ciate with the Casey Foun­da­tion. We hope that state and oth­er gov­ern­ment lead­ers view the cri­sis as an oppor­tu­ni­ty to review the issues pre­sent­ed by a chang­ing econ­o­my — includ­ing the growth of the on-demand sector.”

Address­ing the needs of on-demand workers

The report presents 11 pol­i­cy pri­or­i­ties for state gov­ern­ment lead­ers that are based on the expe­ri­ences of a con­sor­tium of nine states focused on the chang­ing nature of work amid the expan­sion of the gig econ­o­my. Among the pro­posed solutions:

  • encour­age con­tin­ued learn­ing for gig work­ers by cre­at­ing tax cred­its for employ­ers invest­ing in train­ing and edu­ca­tion — and by allow­ing state-spon­sored col­lege sav­ings pro­grams to pro­vide tax ben­e­fits for work­ers incur­ring train­ing expenses;
  • pro­vide sup­port and incen­tives that pro­mote entre­pre­neur­ship and employ­ee ownership;
  • expand employ­ee pro­tec­tions to on-demand work­ers, such as apply­ing exist­ing min­i­mum-wage require­ments to on-demand jobs and cre­at­ing oppor­tu­ni­ties for them to receive legal coun­sel and report ques­tion­able work­place activities;
  • explore pub­lic-pri­vate part­ner­ships to increase access to ben­e­fits, such as paid time off and dis­abil­i­ty insur­ance, to improve work­ers’ finan­cial stability;
  • audit state process­es for work­er clas­si­fi­ca­tion to ensure that employ­ees are cat­e­go­rized cor­rect­ly, and thus pro­tect­ed by rel­e­vant laws; and
  • require employ­ers to give ade­quate notice of work sched­ules, allow­ing for increased sta­bil­i­ty and bet­ter plan­ning for needs like childcare.

The pol­i­cy rec­om­men­da­tions in this report pro­vide impor­tant, inno­v­a­tive ideas for states to address the evolv­ing needs of the work­force and ensure that the on-demand sec­tor is part of that con­ver­sa­tion,” Ger­ber says. We hope pol­i­cy­mak­ers see these rec­om­men­da­tions as a tem­plate for tak­ing action.”

Learn how to sup­port low-wage work­ers in uncer­tain times

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