The gig economy is a term used to describe a labour market characterized by short-term contracts or freelance work as opposed to traditional permanent employment. In the gig economy, workers are often paid for each “gig” or task they complete, rather than being paid a fixed salary or hourly wage.
The gig economy is enabled by technology platforms that connect workers with clients or customers, often through mobile apps or websites.
Essentially the Gig economy has created self-employment opportunities for people looking to escape the limitations of traditional employment. While traditional employment exchanges time for money no matter how productive workers are, service businesses in the gig economy charge for outcomes. Productivity is rewarded by allowing businesses to take on more work and multiple streams of income for more consistent revenue using transferable skills across multiple industries.
Common ways people get paid work in the gig economy include:
Ride-sharing and delivery services:
This includes companies such as Uber, Lyft, and DoorDash, where individuals use their own vehicles to provide transportation or delivery services to customers.
Freelance work is common in the gig economy and includes jobs such as writing, graphic design, programming, and consulting. Freelancers work on a project-by-project basis and are often paid per project.
Online marketplaces such as Etsy, TaskRabbit, and Fiverr allow individuals to sell products or offer services directly to customers. These platforms take a commission on each sale.
Gig platforms such as Upwork and Freelancer connect businesses with independent contractors who can perform a variety of tasks, such as data entry, customer service, and virtual assistance.
Platforms such as Airbnb and VRBO enable individuals to rent out their homes or apartments to travelers on a short-term basis.
Overall, the gig economy offers flexibility and autonomy for workers, but can also come with uncertain income and a lack of job security.
How the gig economy can help people from low-paying industries earn extra income
The gig economy can provide individuals from low paying industries with an opportunity to earn extra income through flexible work arrangements. This is because the gig economy allows individuals to work on a project-by-project basis or perform short-term tasks for clients or customers, often through mobile apps or websites. Here are some ways the gig economy can help people from low paying industries earn extra income:
Many gig economy jobs allow workers to set their own schedules and choose when and where they work. This can be especially helpful for individuals who have other responsibilities, such as caregiving or attending school.
Low barriers to entry:
Many gig economy jobs do not require formal education or training, making them accessible to individuals from low paying industries who may not have a college degree or professional certification.
Variety of job opportunities:
The gig economy offers a wide variety of job opportunities, from driving for ride-sharing services to completing short-term projects on freelance marketplaces. This can allow individuals to find work that fits their skills and interests.
Increased earning potential:
By working in the gig economy, individuals can take on multiple jobs or projects at once, potentially increasing their earning potential beyond what they might make in a traditional low-paying job.
Overall, the gig economy can provide individuals from low-paying industries with a flexible and accessible way to earn extra income. However, it is important to note that gig work can come with its own challenges, including income uncertainty, lack of benefits, and limited job security.
Working from home” vs doing “remote work”.
The terms “working from home” (WFH) and “remote work” are often used interchangeably, but they can have slightly different meanings.
Working from home generally refers to working from one’s own residence or home office, regardless of whether the work is done for an employer or as a freelancer. The emphasis is on the physical location where the work is being done.
Remote work, on the other hand, refers to working outside of a traditional office environment, often using technology to communicate with colleagues and perform work tasks. Remote work can be done from anywhere, not just from home, and may involve traveling or working from a co-working space, a coffee shop, or any other location outside of a traditional office.
In essence, working from home is a subset of remote work, as it refers specifically to working from one’s own home. However, remote work can encompass a wider range of work environments and situations.
It’s important to note that both working from home and remote work require reliable technology and good communication skills, as well as the ability to work independently and manage one’s own time effectively.
While both offer flexibility and freedom to work from anywhere, remote work may require additional skills such as time zone management and strong communication skills to ensure effective collaboration with remote team members.
Work health and safety if the business allows a person to work from home.
Businesses in Australia are still responsible for work health and safety (WHS) Even if employees work from home. This is the main reason why companies forced employees to return to the office after the COVID-19 lockdowns.
If you had an office space to use as part of your work contract, the ATO would say you could not get a tax deduction to set up your home office. If workers chose to work from home, they would be out of pocket and have to set their home office
they have a duty of care to provide a safe and healthy work environment for their workers, regardless of where the work is performed. This duty of care is outlined in the Work Health and Safety Act 2011 (WHS Act), which applies to all businesses operating in Australia, including those who allow employees to work from home. Even sole traders who don’t employ any staff still have to provide as safe workplace for what is their biggest business asset – themselves and their own mental health also comes under the WHS act as a requirement of doing business.
Under the WHS Act, businesses have a primary duty of care to ensure the health and safety of their workers by eliminating or minimizing risks to their health and safety as far as reasonably practicable. This means that businesses must identify, assess and control risks associated with work, including those that arise from working from home, and provide appropriate resources and support to workers to ensure their health and safety.
In practice, this means that businesses must take steps to ensure that their employees who work from home have a safe and healthy work environment, including providing appropriate equipment and ergonomic support, conducting risk assessments of the home workspace, providing guidance and training on WHS requirements, and ensuring that workers have access to appropriate support and resources.
duty of care obligations
If a business fails to meet its duty of care obligations under the WHS Act, they can be held liable for any harm or injury caused to their workers, and may face legal and financial consequences, including fines, compensation claims, and reputational damage.
This is a reason why even if you do contract work these days, the business employing you will generally want to see evidence that the sole trader has public liability insurance specific to that industry. If you don’t know what is a high risk activity from a WHS point of view for your industry, look at what your insurance quote covers to guide your operational plan.
The higher the premium, the more high risk activities are in the normal job tasks in the gig economy. This can be a barrier to entering the gig economy in some industries, so the gig economy is not for everyone.
But one thing is for sure, the Gig economy is here to stay. Particularly in industry where low skilled labour get a low hourly rate, and is also addressing the gender pay gap as reward for effort rather than being the best is also a feature of the gig economy.