Gig Economy

HR Glossary for HR Professionals

Glossary of the most common HR terms and acronyms to assist professionals navigating the ever-growing and ever-changing world of HR terminology.

Gig Economy

What is the Gig Economy?

The gig economy, or gig work, includes ways to earn income outside of traditional, long-term employment. In some cases, gig workers can be identified or classified as independent contractors.

Traditional Work vs. Gig Work

Traditional workers typically receive hourly pay or salary pay. Unlike gig workers, they are usually direct employees for a company and engaged in long-term employment relationships for that company. 

Outside of that, companies often hire gig workers to complete specific projects in a certain timeframe. In some of these cases, the company that pays the gig worker is different from the one they are actually working on the project for.

Additionally, companies can define gig workers by their tax status. Employees, or traditional workers, receive W-2 forms from their employers. Gig workers, or non-traditional workers, receive 1099 Forms from their employers when they perform services for a company without being a direct employee.

Examples of Gig Economy Jobs

Gig economy jobs exist across many different occupations. They may include web design, driving, care work, construction, retail, and many more.

What Laws Protect Gig Workers?

According to the Equal Employment Opportunity Commission (EEOC), employment and labor laws do not apply to independent contractors. Still, employers should adhere to regulations that prevent discrimination to avoid potentially harmful litigation—and boost recruitment and retention.

Additionally, during the final days of the Trump administration, the Department of Labor (DOL) issued a ruling that was designed to implement an “economic reality” test to determine the independent contractor status of a worker. However, after a change in presidential administrations in January 2021, the clarification has been withdrawn in an announcement from the DOL in May 2021. Read more about the update here.

« Back to Glossary Index