Legal Issues Involved in the Gig Economy

The gig economy encounters various legal issues that arise as the freelancer progresses through various clients and company relationships which can include contract problems, misclassification, litigation and the serious lack of benefits. Legal matters in the gig economy may require the services of a lawyer to find and retain a remedy.

Redefining Work

One legal issue that can spawn many other is the fact that the gig economy is redefining how work occurs in the United States and even the world. A single individual can work from any point without the need to go to an office or face supervision the whole time. He or she can also accomplish the work tasks in his or her own way without someone telling what to do and how to do it. Another benefit is that the freelancer can acquire multiple clients and increase income easily with numerous skills. However, this does cause concern in the standard company work and could create legal problems in the future.

Disruptive Industry

The gig economy is what others could consider a disruptive
industry with new and innovative ways to complete work. This could change how American citizens complete work in the company and redefine contract employment. However, even if various legal concerns arise through a change in the industry, the companies in the country still must abide by certain laws. With a change in these laws to provide for more opportunity and more power over completing work outside the standard day or night shift, legal issues will cause administrations and states to reconsider labor and employment matters.

Pay and Labor

Laws regarding fair pay and labor in the state are legal issues that can arise with the gig economy. The person working as a freelancer has no access to benefits from a company in the standard gig economy relationship with the business. This also leaves out days off, vacation days, sick leave and other time off with pay. The labor laws of the state usually kick in to ensure employees have fair dealings in employment, but the gig worker does not have access to these because the laws are not in support of freelance work. Additionally, the freelancer does not get insurance or other benefits as a right with these contracts.

Taxation in the Gig Economy

The freelance worker is an independent contractor as considered by the state and country laws. He or she must apply taxes to each payment received from clients rather than have these taken out by the work relationships. This requires the freelancer working in the gig economy to know how much in taxes is necessary to pay for both federal and state taxation periods. The individual may need to research the tax laws and also contact the Internal Revenue Service for paperwork and the correct forms because they are not the same as when working for a company.

On Demand and Job Security

Another issue that tends to progress against the standard labor laws is that the freelance or gig worker is usually on demand at all times. He or she can increase job security by always looking for the next client and work, but without any downtime, this can also affect each contract. On-demand work usually has certain rules that would apply to protect wages with labor laws. However, a freelancer does not have this security with the gig economy. These legal issues can also affect what possible laws change in the future based on an increasing change to the gig economy.

Precarious Contracts

As the gig economy progresses into the future, the lean on contractual work rather than standard employment can cause legal issues. The contract agreement can cause a precarious situation when each freelancer uses a contractual relationship for work. These documents can have looser terms and could apply to different scenarios that could increase the possibility of legal problems. One of the primary concerns is the contract breach that can leave a freelancer without payment if the other party decides to cause trouble. Contract terms and provisions may also become unenforceable if a lawyer does not assist in ensuring the document is valid.

Legal Support for Gig Economy Legal Issues

While the individual freelancer will need legal support for contracts and other gig economy work, lawyers may become indispensable in the future to assist with gig economy laws. The independent contractor can use a lawyer’s services to help enforce contract provisions and seek compensation for breaches with working relationships in the gig economy.

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Disclaimer: Every effort has been made to ensure the accuracy of this publication at the time it was written. It is not intended to provide legal advice or suggest a guaranteed outcome as individual situations will differ and the law may have changed since publication. Readers considering legal action should consult with an experienced lawyer to understand current laws they may affect a case.

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