The gig economy has evolved beyond being considered unconventional. A growing number of workers are now sold on the entrepreneurial romanticization of “hustle culture” (i.e. be your own boss). They like that it offers more ownership of their life and that it can provide some degree of financial freedom. For those looking to tack on a short-term independent contractor position to their workload, it’s important to know what you may have in store.
Let’s start by taking a hard look at the term “side gig.” Its meaning changes depending on who you ask, but the key word to focus on is “side.” They’re jobs intended to be supplemental sources of income – secondary to a stable job.
Recently, though, some workers – either out of necessity or by choice – have substituted conventional full-time employment with income earned solely through side jobs. The flexibility and, maybe more importantly, availability of working multiple side gigs has, for some, offered conveniences a standard 9-to-5 doesn’t. During the pandemic, especially, the gig economy kept many workers afloat.
Choice vs. Necessity
It’s important to note the distinction between choice vs. necessity. All gig workers are not one in the same. Some take on side gigs to pursue a passion they hope turns into a business that provides a primary source of income (i.e. freelancing). Others are forced to take on multiple jobs in order to make ends meet, pursuing side gig like those offered through app-based platform technology (Uber, Lyft, Doordash, Shipt).
So, what happens when people start utilizing app-based technology platforms meant to be side gigs as their full-time jobs? This is where it starts getting a bit complicated. The recent uproar caused by Proposition 22 in California saw ride sharing drivers push major companies to classify them as employees, not independent contractors. The job serves as their entire livelihood but offers no benefits and incurs cost.
In other words, the gig economy is not as simple as it used to be. Let’s not forget the gig economy also consists of freelancing, highly skilled contractors, consultants, and part-time workers. Those options are all expanding as the remote workforce creates new possibilities for businesses to cast wider nets and hire alternative workers.
Add Self-Reflection to your Checklist
This is where self-reflection comes into play. Many gig workers can attest to feeling stuck once they decide to make the change in order to keep themselves above water.
“Ask yourself, ‘What are the primary reasons behind wanting to be a gig worker?’ Once you have a solid understanding, it really comes down to seriously taking into consideration the pros and cons,” says Kipp Kramer, a long-time gig worker (pre-app-based technology) and Founder/Executive Director of Kramerica Gives.
Kramer chooses to be a gig worker out of both necessity and as a preference. He pursued his dream of starting his own non-profit in 2015, which is difficult to balance while having a full-time job. He enjoys the flexibility that comes with balancing five gigs but accepts that it comes with a cost. It especially helps to have a partner with a stable job.
If you’re thinking about becoming a gig worker, whatever that may mean to you and your situation, here are some things to keep in mind:
- Your taxes may get a bit complicated. Most gig workers have multiple types of income, which is often a mix of W-2 and 1099 forms, and sometimes even cash. That means it’s important to calculate how much you have to pay back for taxes. Regular W-2 employee rely on their employer to do that for them, but side gigs are different. Kramer says he heavily relies on his Tax Accountant and urges gig workers to find a trustworthy expert who really knows what they’re doing.
- Most gig workers do not have health and insurance benefits. As the gig economy continues to evolve and become more prominent, many are pushing for policy change. Stay up to date on any recent legislation helping gig workers. Portable benefits are on the horizon, but there’s still a long way to go.
- Create a safety net before and after becoming a gig worker. This is why self-reflection is very important. Think about your primary reasons for adding a side gig and decide whether you want it to be a temporary or permanent change. Have enough money set aside to cover your basic necessities and continue to strengthen that safety net so you’re able to get out of gig work when you’re ready. Setting financial and professional goals will help.