The post-COVID economy has seen freelancing become more popular. That is where the term ‘gig economy’ originated from. An economy that has transformed the way people work, offering flexibility and opportunities for freelancers and gig workers.
However, this shift in the employment landscape has sparked intense debates about workers’ rights and protections. Do gig workers and freelancers have rights? What is the extent of their rights, and how does it correlate with their responsibilities?
How the Gig Economy works
The gig economy is typically characterized by short-term, freelance, and on-demand work. This is totally different from what we knew to be the traditional employment structures. It means the companies can take on talents to deliver specific tasks in a short-term arrangement with specific commitments from both parties.
This is an arrangement that provides flexibility to both parties. The company can take on the role when needed, and the freelancer can take on the job when needed. This is the flexibility to choose when, where, and how much they work. Companies like Uber, Lyft, and TaskRabbit rely on independent contractors for services, providing work as and when needed. As a UBER driver, you have your car and decide when to take on customers/passengers, for example.
With all the flexibility, autonomy, and freedom that this arrangement offers, there are legal scrutiny questions about their rights and responsibilities. While this model offers autonomy, it has raised significant concerns about workers’ rights and protections.
Right to receive stipulated payments/remuneration when due
The freelancer has the right to receive the agreed payments when due, as well as an accompanying responsibility to deliver the tasks as stated in the contract and when due. There are some primary legal discussions about freelancers missing out on essential benefits such as health insurance, workers’ compensation, and overtime pay. What do you think about this?
Right to serve multiple clients in the same industry?
This is a very tricky and often not something that most employers like. Since you have this person as a contract employee or a freelancer who delivers specific tasks, are you also cool if they offer the same service to your competitor in the market? Do you think it will put some of your trade secrets at risk? Or affect your numbers in some ways?
When making a freelance or gig contract, you can never go overboard in defining what is allowed and what is not. If you want to ensure that the freelancer does not service your business and a competitor simultaneously, what are you putting in place to compensate for that? If, by offering you a service, the freelancer is suddenly restrained from doing the same for 20 other competitors, then there has to be some way to make up for it.
Right to terminate the contract whenever you want?
Gig workers often lack the job security traditional employees enjoy, leading to concerns about their financial stability and access to social safety nets. When it comes to terminating a gig contract, what are the terms? And what have you stated in your agreement? Can either party terminate the contract at any time? Is there a required notice period? How long is this notice period? If a party wants to terminate the arrangement without due notice, what is the penalty?
Worker Autonomy vs. Company Oversight
Gig workers value the autonomy of freelancing, but this raises questions about the level of control companies should exert over their work. Striking a balance between worker autonomy and company oversight is crucial for defining the boundaries of rights and responsibilities.
Mutual Accountability
Establishing a framework of mutual accountability requires clear communication, transparency, and fair treatment from both parties.
Does the law say anything about the gig economy?
While there may not be precise legal specifications on this, I think it will come down to your specific contracts and what you have stated.
- When is the freelancer required to work or turn in tasks?
- When is the employer required to pay for work done? Before or after the task is done?
- What happens when there is a default from either party? What if the freelancer fails to turn in work when it is due?
- Is there a clause that prevents the freelancer from going to a competitor firm?
- Does your agreement describe him as an independent contractor or an employee?
- What added payments or benefits is the freelancer entitled to if he decides to ignore your competitors and exclusively service your business?
- Will payment be made based on time spent on the task or the task delivered?
- Is there a minimum wage specified for the freelancer?
It is always advisable to clear every grey area in a written contract, especially if it is a long-term arrangement. Balancing the need for flexibility with fair compensation and protections is a critical ethical consideration.
As the gig economy evolves, finding common ground to safeguard workers’ rights while preserving the flexibility that defines this new era of work becomes paramount for a fair and sustainable future.
