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What Is A Gig Worker? A Simple Explanation Anybody Can Understand

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The gig economy has made major changes in the job market nowadays. Everyone is caught up with the gig-working model in one way or another.

But what is a gig worker?

There’s a fine difference between being an employee and being a gig economy worker. Are gig workers employees or employed?

This article outlines the main differences between being employed and being an employee. It also states the typical characteristics of a gig worker and how to make money from gig work.

Key Takeaways

  • Gig workers engage in short-term, flexible jobs, often as freelancers or independent contractors, prioritizing flexible lifestyles over traditional employment benefits.
  • While gig workers are considered employed, they differ from traditional employees in that they often manage their own schedules, workload, and are typically self-employed.
  • The gig economy includes various professions like writing, design, IT, and more, with gig workers bringing unique skills to each project.
  • Gig workers handle their finances and taxes, with income varying widely based on the job and skill level. They usually don’t receive standard employment benefits but may have access to alternative options.

What Is a Gig Worker?

A gig worker is an individual who engages in short-term, flexible jobs, typically as a freelancer, consultant, or independent contractor. Unlike traditional employees bound to a single employer, gig workers operate in the gig economy, taking on various projects from different clients, often facilitated through online platforms.

vector graphic showing an illustration of what is a gig worker

The gig economy encompasses a diverse range of professions, attracting individuals with various skills and expertise. This includes writers, graphic designers, IT consultants, marketers, translators, and more. Each gig worker brings a unique set of skills to their short-term projects.

Successful gig workers usually possess not only specialized skills in their field but also exhibit strong work ethics, effective time management, and a continuous drive to learn and adapt.

One of the defining features of gig work is its lack of formal, long-term commitment between the worker and the employer. This flexibility appeals to many gig workers, who often prioritize a flexible lifestyle over traditional employment benefits.

As a result, many gig workers juggle multiple projects or clients simultaneously, tailor-making their careers to suit their personal preferences and professional goals.

The gig economy, thus, represents a shift towards more autonomous, self-directed work arrangements, driven by the evolving needs and priorities of the modern workforce.

Is a Gig Worker Considered Employed?

Yes, a gig worker is considered employed, but their employment status differs from traditional employees.

Gig workers are often self-employed, meaning they manage their own schedules and workload without being tied to a single employer. While they do not receive the typical employment benefits provided by companies, such as health insurance or retirement plans, they are actively working and earning income through their gigs.

This self-employment status in the gig economy grants them flexibility and autonomy, distinguishing them from traditional employees who often have more structured employment relationships and benefits.

Self-employed workers have control over their schedules and workload. This sometimes applies to contingent workers but isn’t always the case.

Is a Gig Worker the Same as Self-Employed?

No, a gig worker is not always the same as being self-employed. While some gig workers are self-employed, offering their skills to multiple companies or businesses as freelancers, others work through apps like Lyft, Uber, or Doordash and are not considered self-employed.

Self-employed gig workers, like freelance copywriters or graphic designers, have greater control over their work and schedules and are responsible for their own finances and taxes.

In contrast, gig workers who rely on specific apps for their jobs do not have the same level of control or ownership over their work, as they are largely dependent on the business model and regulations of the single app or company they work through.

Traits of a Gig Worker

Here are some characteristics shared by gig workers. Focus on these traits to succeed as a gig economy worker.

  • Self-Discipline: Freelancers and independent contractors have no bosses. That requires some self-discipline to do the job well.
  • High Qualifications: To compete in the gig economy, you should be highly qualified. The more skilled you are, the more gig jobs you’ll get.
  • Time Management: With no boss, you’ll need to manage your time well. Sometimes, you’ll be working on several projects simultaneously. That makes time management a crucial trait.
  • Strong Motivation: It’s not only about the money. Gig workers need to have a strong motivation to look for and find gig work.

Types of Gig Workers

Gig workers come in different categories, as the section below discusses.

1. Freelance Work

A freelancer performs specialized labor such as graphic design, programming, and write-ups. If you are a freelancer, you can provide services for which you have a background or education. Some companies and clients refer to freelancers as contingent workers or contract workers.

You can always establish your business practice as a freelancer and grow into a big company. This way, you’ll do more than just perform tasks for clients.

Besides the projects, you can also market, network, and do your back-end support.

2. Gig Economy Platform Work

The gig economy has various online platforms where you can get work. Besides, the business sector has started to embrace remote work. As a result, some traditional employers have opted to look for contractors on gig economy platforms.

Some businesses often need independent contractors or freelancers to handle specific tasks. So instead of a full-time employee, the companies go to the gig economy platform to find a freelancer. Typical working-class available in gig economy platforms include casual earners and free agents.

3. Self-Employed Work

If you are self-employed, you aren’t necessarily a gig worker or a freelancer. But, since self-employment is self-directed, freelancers and gig workers are self-employed.

You can also operate a sole proprietor under your name as a freelancer unless you choose otherwise. Self-employment comes with the need to pay the federal tax rate on earnings. So, you can create a business structure around your business to protect yourself from liability.

You also lower your income if you pay yourself a salary. So, in the long run, you reduce the tax burden you would otherwise bear if you filed taxes as a sole proprietor.

Examples of Gig Work

There are several types of gig work to choose from. The question is whether the big names we hear daily are part of the gig economy. All of them were impacted by Prop 22, also known as AB5.

vector graphic showing an illustration of the best fiverr gigs

Is Uber Gig Work?

Yes, Uber is one of the most famous gig companies that hire drivers as independent contractors.

Uber connects you with the clients, and the rest is all yours. You’ll have to pay your taxes and buy your benefits if you choose to.

Is Airbnb Gig Work?

Yes, although not in the traditional sense. Airbnb connects renters with homeowners. Some people consider that gig work since they work independently through the app.

Other people don’t consider it part of the gig economy because there’s no labor or skill sets entailed.

Is a Task from Upwork Gig Work?

Yes, Upwork is a popular digital platform for gig work. With the required skill sets, you can find gig jobs on Upwork.

The platform only connects you to the client. That way, you work independently, which makes you a freelancer or an independent contractor.

Do Gig Workers Make Good Money?

When it comes to money, it’s hard to give an exact answer. The amount of money you make depends on the gig job you perform and your skill level. That said, some gig apps pay relatively more than others.

On average, the annual income of gig workers ranges between $46,000 and $79,000. The five highest-paying gig companies include:

  1. Instawork: The average annual pay is $51,637
  2. Doordash: It offers $46,714 yearly on average
  3. Instacart: Expect $46,476 on average annually
  4. Shipt: You can make $45,302 on average
  5. Uber: With enough driving hours, you can reach $45,242 yearly

Do Gig Workers Pay Taxes?

Yes, gig workers pay taxes. It’s crucial to remember they’re considered 1099 contractors rather than W2 employees. The status of gig workers is different from that of traditional employees. The companies that focus on the gig model connect workers to employers.

Gig workers are responsible for doing their tax forms. That has changed with the approval of Prop 22, also known as AB-5. This bill states that gig companies have to re-categorize gig workers as employees. That way, they can get minimum wage and some traditio

Do Gig Workers Get Benefits?

You don’t get employee benefits if you work in the gig economy. Nonetheless, you can get certain benefits from a company or through a contract over time.

You could also become an employee of one company and remain an independent contractor of a different business. The good news, plans are underway for some independent contractors who do gig work.

The aim is to arrange for portable, and many employers plan to become more mainstream for gig workers. For example, Uber plans to support portable benefits. So if policymakers can develop a favorable tax model, gig businesses will have a more stable foundation.

Do Gig Workers Get Health Insurance?

Employers consider you a contract employee if you work in a gig economy. So, they’ll not always offer health insurance.

Nonetheless, you can buy self-employed health insurance from different companies. Some typical coverage sources to consider are as follows.

Short-term Health Insurance

A short-term plan is an ideal option if you want a limited cover for a short period. Then, you can save money to protect yourself with essential services. Besides, with such a plan, you don’t need to pay a monthly premium for major coverage.

Individual Health Insurance

Also known as self-employed health insurance, individual health insurance only covers one person. You’ll have to buy the cover during an open enrollment period.

Medical Insurance Packages

Medical insurance packages help you save on costs and still get quality coverage through various products.

Unfortunately, under the ACA, medical insurance packages don’t qualify as self-employed health insurance. But, you can use the funds to pay dentists, hospitals, and doctors.

Qualified gig economy health insurance plans protect you from the ACA penalty for people who lack qualified coverage.

Do Gig Workers Get Paid Social Security?

The income from gigs counts towards your social security earnings. Your average lifetime earnings depend on your total annual income, which includes traditional and gig jobs.

Your annual earnings for social security is the net profit from your schedule C. Thus, if you deduce that particular money is a business expense, the said finances don’t count towards your social security record.

Are Gig Workers Eligible for Unemployment Insurance?

Gig workers were ineligible for unemployment insurance. Nonetheless, congress authorized gig workers and freelancers to collect benefits under a new plan.

The new program — the Families First Coronavirus Response Act (FFCRA — was formulated during the covid-19 crisis.

Unfortunately, some rampant fraudulent unemployment insurance claims have increased during the pandemic. So, as a gig worker, you must provide documentation of your earnings to get unemployment benefits.

How Do I Become a Gig Worker?

It’s easy! Follow these simple steps to become a successful gig worker and benefit from what the gig economy offers.

1. Assess Your Abilities

To compete in the fierce gig job market, you need to have a certain skill set. This isn’t limited to formal qualifications. Your experience also matters.

Start by asking yourself, “What can I do best?”

Fortunately, there is room for every skill and knowledge in the gig economy. If all you know is how to drive a car or ride a bike, you can still find gigs.

2. Enhance Your Skills

Now that you know what your abilities are, you can start polishing them.

The competition is strong and you need to keep an edge. That’s why you should sharpen your skills through courses, workshops, or even reading.

The more skilled you are, the easier you can land gigs.

3. Find Gigs

Where can you find gigs? It depends on the gig work you’re looking for, but here are some popular places to find gigs:

  • Fiverr: This is the largest gig economy platform listing gigs in all fields. It doesn’t offer high pay, but it’s a great starting place to build a portfolio.
  • FlexJobs: This site is scam-proof and only for a small monthly fee. It lists a variety of gig jobs from freelancing to part-time or project-based work.
  • TaskRabbit: That platform’s dedicated to labor jobs. It notifies you of all the jobs in your area to choose from.

How To Find Gig Work

You can use the internet and apps to find gig work. Three ways to do so are to use marketplaces, find a company, or work with staffing agencies.

1. Gig Worker Marketplaces

Different technology-enabled platforms connect you with gig opportunities. Digital marketplaces usually focus on particular industries or jobs. So, you interact with clients and other gig workers on the market with legitimacy and transparency.

2. Gig Worker Companies

Also known as the sharing economy, gig worker companies consist of independent contractors who offer different services.

So, you can join a gig worker company to market yourself to clients. Then, the clients who need your services can contact you when a gig is available.

3. Staffing Agencies

With staffing agencies, you work with a recruiter who identifies opportunities that fit your experience. You’ll also have a coach who can guide you through the hiring process. Recruiters understand the current rate for candidates with your skillset, so you won’t sell yourself short.

Frequently Asked Questions

These are some commonly asked questions about what a gig worker is.

Are gig workers happy?

The answer to this question depends on the gig worker. No one can give a clear answer to that. Some gig workers are happy with the flexibility gig jobs offer. Others are unhappy with the lack of employment benefits and stability.

What does gig stand for?

Gig is a slang term that Jazz musicians in the 1920s used to refer to live concerts. The word has expanded in scope to include all temporary jobs. Nowadays, a gig means any project-based job offered to freelancers or independent contractors.

How Many Gig Workers Are There?

More than 36% of American workers take part in the gig economy as a primary or secondary job, translating to around 59 million Americans
Moreover, the gig economy is growing every day. Projections show the number will rise even more as more workers explore the flexibility of independent work.

Wrapping Up

A gig worker is a freelancer or independent contractor who takes advantage of the gig economy. To be a gig worker, you need motivation, determination, and skills.

Fortunately, there are several places to find gig work. If you have any questions regarding this matter, drop them in the comment section.

Gig workers are different from employees. They don’t get the benefits but can still make good money.

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