There’s a growing tendency for workers to request mobility in the labor market. Coupled with this is a growing tendency for businesses to classify workers as independent contractors instead of employees. This phenomenon has been dubbed a “gig” economy. Recently, Uber agreed to pay $100 million to the state of New Jersey to settle a dispute over how it classified its workers. Employers should take note.
What Is a ‘Gig’ Economy?
A gig economy is an environment in which temporary positions are common and organizations contract with independent workers for short-term engagements. A gig worker includes independent contractors, online platform workers, contract firm workers, on-call workers, and temporary workers. They enter into formal agreements with on-demand companies, like Uber, to provide services to the company’s clients.
