Graebel Companies, Inc. recently surveyed gig workers in three global markets to better understand their attitudes, expectations and preferences for participating in the on-demand worldwide economy. It’s a fascinating snapshot of this rapidly growing segment of the labor market, with some analysts predicting that more than half of employees will be gig workers in the near future. The survey found 83 percent of gig workers – also known as freelancers, contract workers or independent contractors – in the U.K., U.S., and Singapore are interested in relocating to another country for a contract job. Of course, as an HR executive working for a leading provider of global talent and workplace mobility solutions, this survey reinforces for me the opportunity for international companies to figure out how to successfully include gig workers as part of their talent management program.
The global gig economy is a rapidly increasing trend and is here to stay, largely due to technological advances around the world. However, the way I see it, laws and regulations haven’t kept up with this labor market evolution. For example, HR professionals are well-acquainted with the distinct classifications of employees and non-employees, as well as the potential legal and financial implications to a business when these classifications are not properly maintained.
The findings in our three-country study raise questions about what is the distinction between gig workers and employees. Regardless of location, it’s complicated.
Under U.S. employment laws, whether a worker is an employee or an independent contractor/gig worker depends on the application of a complex legal test, not on the existence of an independent contractor/gig agreement. State and federal courts have weighed in, but each situation requires careful evaluation of a series of relevant factors.
One way to help determine the difference between an employee and a gig worker in the U.S. is to ask yourself the following questions:
- Does the worker have control over how the work is to be performed?
- Does the worker have an opportunity for profit or loss?
- Did the worker invest in the equipment or materials required for their work?
- Do the services rendered required a special skill?
If the answer is no to those questions, and if the services rendered are an integral part of the company’s business, they will more than likely be classified as an employee. If the answers are yes, you may be working with a gig worker.
Every country’s local law offers up a list of factors distinguishing contractors from employees. Generally, countries’ lists of factors are surprisingly similar from nation to nation. From an international perspective, using an independent contractor/gig worker can be challenging, because, as I said earlier, the compliance/regulatory world is not aligned with the gig trend; most countries have rigid requirements as to whom can perform work in their country. However, given a company’s specific circumstances, they could stand to benefit by recruiting and engaging professional gig workers as a way to meet growing talent needs and the current and next generation of workers.
In fact, in our Graebel research, nearly all Millennial gig workers surveyed (95 percent) would be interested in relocating to another country for a contract job. These are two considerations for global companies before hiring gig worker:
Carefully research the potential host country’s employment laws and regulations. The rules are unique to each country, and I suggest reviewing the specific requirements for each country. For example, if you wish to engage a U.S. citizen for a short term overseas assignment, using an employment agreement, specific terms will be called for. In some cases, you may have to hire local workers or utilize a temporary staffing agency in the country.
Determine how to tap this growing talent pool by balancing company and contractor needs. Our global gig survey found many gig workers are seeking support from companies to make the relocation feasible, including a housing allowance and/or financial assistance for rent and language courses and/or cultural training. This may or may not be possible, but global companies should be aware of such expectations and desires as the gig worker trend grows.
The gig economy continues to be a two-sided trend with creative solutions needed. On one hand, workers are looking for more flexible options outside the traditional workplace and schedule. On the other, companies are seeking to fill their global talent needs. The two sides can come together if a balance can be achieved that meets both worker needs and the HR/regulatory protections.