The gig economy has ushered in a new model for employment in the last few years. Thanks to the internet, entrepreneurs can hire freelancers from all over the world. At the same time, the American workforce can go online and compete for gigs worldwide.
This new economy has changed the way we do business and is expected to transform the entire economy by ushering in a new era in employment in the coming decades.
By definition, gig work refers to all non-conventional income-earning activities that lie outside the boundaries of long-term employment. Right now, more than one in four workers does some form of gig work.
Many workers choose to do some gig work on the side without leaving their main job. Others work solely with contracts, and some are freelancers who focus on one-off gigs. Today, one in ten workers rely solely on gigs to make a living.
The gig economy is powered by popular online platforms such as Fiverr. People looking to employ gig workers can find skilled labor at low prices. This is a mixed blessing both for workers and employers.
On one hand, people can find work easier, but the competition is now fiercer than ever before. On the other hand, while employers can browse millions of workers worldwide, there is less reassurance about the skills and the reliability of gig workers.
Tax and Payroll Implications
Gig workers still have to pay income taxes insurance contributions. In essence, gig work is self-employment, unless a freelancer has signed a contract or some other arrangement with the company they work for.
Employers working with a remote workforce, might not even have to worry about payroll accounting. Even when they have to deal with pay stubs and other payroll issues, digital services such as ThePayStubs make it easy to generate, print, and use check stubs online.
Either way, your payroll department should adapt to the new market sooner rather than later. Even if you don’t hire gig workers right now, you might need to in the future.
The Future of Work
Experts predict that the gig market will keep expanding in the coming decades. Fueled by cheap internet and mobile devices, more and more people will be able to work remotely and rely less on long-term employment.
Employers will have to adapt to the new reality of work. Payroll should be flexible to accommodate remote, short-term workers, and HR should embrace social media and the use of digital hiring platforms such as UpWork.
Gig workers will enjoy a global market, but will also have to deal with global competition and their own taxes and FICA.
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