The Gig Economy’s Impact on Work Comp

Claims Management
Cost Containment

March 05, 2020

A gig economy worker delivering a package to a customer

Around 30% of Americans work in the freelance, or “gig” economy, as it is more commonly referred. These employees work out of the traditional scope of employment, and therefore, are not covered under traditional workers’ compensation policies. Jobs include short-term tasks, independent contractors and temporary agencies. Americans are finding satisfaction and freedom in gig careers, but what does it mean for workers’ compensation?

On average, gig employees are around 8% happier than their peers. Yet, gig economy work has higher injury rates than their conventional counterpart.  Many occupations in the gig sector are physically demanding. These environments create an above average risk of injury, including construction, farming, truck driving and housekeeping. With 1 in 10 serious work-related injuries happen without workers’ compensation coverage, this statistic is likely to increase with the growing trend of gig employees.

Currently, there is a lack of adequate state regulations regarding gig employment and no formal coverage plans to protect workers from injury. To address independent contractor issues and misclassification of employees, states are beginning to draft and adopt bills to aid in determining worker status. Depending on the gig worker’s employment classification, they may be able to receive workers’ compensation benefits from their employer.