COVID-19 and the World of Freelancers

Across the world, a number of emergency funds and new laws have been enacted to financially aid employees that have been laid off due to COVID-19. Each region offering these economic relief benefits has different eligibility requirements, from being laid off due to COVID-19 to interest free loans for small business, and deferred tax payments. However, while policies are still being created, there is one general area that is quite uncertain across North America – what do all of these laws mean for those that are freelancing in the gig-economy?

Traditionally, gig-workers (such as those who work with Uber or Skip the Dishes), are considered contractors, and have not previously had access to unemployment benefits like what is offered to traditional, full-time employees. Most employees have access through their employers to health insurance, paid time off (PTO), workers’ compensation, and unemployment insurance. In addition, those who are traditionally self-employed (i.e. through their own enterprise, corporation or sole proprietorship) may opt into these benefits as well. But this leads us to question: What about the fate of those independent contractors hired through a platform such as Uber? They are considered independent contractors; however, the company doesn’t hire them for a service that could technically be classified as the service provided by an independent contractor. This leads to an additional question: Have those who work for companies like Uber and DoorDash been misclassified as an ‘independent contractor’?

Based on American legislation, if an employee is misclassified, the company can be responsible for paying hefty fines for such misclassifications. This is, however once again, becoming a gray area due to the fact that under the Coronavirus Relief Bill in the USA, contractors and self-employed workers (including those that are freelancing, or working in the gig economy) can apply for unemployment benefits if they can prove with certainty that they have been financially affected by COVID-19. These benefits may include up to 39 weeks of benefits based on the last filed tax return, plus the potential for an additional $600 per week for up to a maximum of four months.

The laws invoked due to COVID-19 are similar to those generally initiated in the face of a natural disaster; however, the bill that has been enforced at this time is only applicable until the end of 2020. Overall, it will be interesting to see how this changes the face of the gig economy as we consider the fate of freelancers across North America. Recent statistics have shown that approximately 36%, or around 55 million Americans, are working in some capacity in the gig economy, with 4 in 10 freelance workers making the majority of their annual income from their freelancing work in the gig-economy. This is a huge proportion of the American workforce that will be affected by the workforce changes taking place amidst the COVID-19 pandemic. It would not be uncommon to see the support provided to gig-economy workers (in the form of extended benefits, unemployment insurance, healthcare, and workers’ compensation) resulting in some massive transformations in the next few years as ever more workers move from a traditional working situation to a role within the gig-economy.

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