- While gigging provides flexibility, it also leaves workers without entitlements such as sick and holiday pay or superannuation.
- 7.1% of Australians use a digital platform to work. The most popular platforms are Airtasker, Uber, Freelancer, Uber Eats and Deliveroo.
- Both the ATO and IR have guidelines for people earning income via digital platforms or working multiple jobs.
Compiled by Stuart Ridley
Defining the gig economy
The phrase ‘gig economy’ was coined at the height of the global financial crisis in 2009 as many professionals found themselves suddenly unemployed and started ‘gigging’ – juggling several casual jobs to stay afloat. Since then, the rise of platforms such as Uber and Airtasker, that rely on temporary work, has seen ‘gig workers’ become part of the economy.
Proposed changes to how work is defined
In September 2018, an Australian Senate Select Committee on the Future of Work and Workers issued its Hope is not a Strategy report with these recommendations around the gig economy:
- Review the definition of ‘casual’ work in light of the large numbers of Australians who are currently in non-standard employment.
- Ensure legislated workplace health and safety and improved superannuation rights for workers who are not classified as employees and/or perform non-standard work.
- Make legislative amendments that broaden the definition of an employee to capture gig workers and ensure that they have full access to protection under Australia’s industrial relations system.
- Conduct research into the direction and further development of digital platform work, to ensure that proposed changes emanating from this report have the intended impact in protecting workers.
Is an Uber driver an employee?
Internationally there is disagreement over whether gig workers are ‘employees’ or ‘independent contractors’. Here are three notable rulings.
- October 2016 – The UK Employment Appeal Tribunal (EAT) found that Uber drivers are workers rather than independent contractors, as ‘sufficient control was exercised over the way in which the drivers worked’ to classify them as workers. Uber appealed in December 2018 and lost again.
- December 2017 – The Fair Work Commission in Victoria, Australia found that Uber drivers are independent contractors, rather than employees, as they are not required to accept a certain percentage of rides (‘no expectation of work’).
- June 2019 – Australia’s Fair Work Ombudsman found that Uber drivers are independent contractors, not employees, because there is not “an obligation for an employee to perform work when it is demanded by the employer”.
Different types of gig worker
A 2016 McKinsey Global Institute report, Independent Work: Choice, necessity, and the gig economy, identified four segments of gig workers:
- Free agents – people who choose to make their main income from independent work
- Casual earners – people who choose to supplement their main income with independent work
- Reluctants – people who would prefer traditional jobs, but make most of their income from independent work
- Financially strapped – people who do supplemental independent work out of necessity.
Some gig platforms enable people to make money from their labour (such as Uber, Airtasker, Freelancer and Deliveroo), while others help them earn cash from their assets (such as AirBnB, eBay and Car Next Door).
How widespread is gigging?
A survey commissioned by the Victorian government, Digital Platform Work in Australia, published in June 2019, reported 7.1% of Australians use a digital platform to work.
The top five platforms used by those workers were:
- Airtasker (34.8%)
- Uber (22.7%)
- Freelancer (11.8%)
- Uber Eats (10.8%)
- Deliveroo (8.2%)
The report also found that of those platform workers surveyed:
- 64.8 % access work via only one platform
- 35.2% access work through more than one platform
- 11.4% are registered on four or more platforms.
Gigging is even more widespread in the US. “Getting a real measure of this global phenomenon is not easy, especially when some may underestimate its true size by considering only gig work as a primary source of income,” says Simona Scattaglia Cartago, KPMG’s global insurance technology and global accounting change implementation leader.
“In the US, more than 35% of the workforce seems to be participating in the gig economy, and that number is expected to jump to 43% by 2020.”
Upsides and downsides to gigging
Gigging work has its upsides and suits some people. Benefits include:
- Flexible hours
- Geographic mobility
- Opportunities for unskilled workers.
But there are a lot more downsides:
- No sick leave
- No holiday pay
- No superannuation entitlements
- No redundancy entitlements
- Possible adverse tax implications
- Not covered by workers compensation
- No minimum wage
- Lack of training
- Risks to personal property (such as vehicle or home)
- Income not recognised by banks when applying for a mortgage or other loan.
A superannuation problem
The Association of Superannuation Funds of Australia (ASFA) noted in February 2018 that almost a quarter of self-employed people have no super, and warned that as people do more gig work, the less likely they are to meet the A$450 per month earnings threshold with any one employer that entitles them to superannuation guarantee payments.
To enhance worker protections, it suggested ditching the A$450 earnings threshold and amending the law to create a new ‘dependent contractor’ category, that sits between employee and independent contractor.
Taxing issues for gig workers
The Australian Taxation Office in June 2019 updated guidelines for people earning income via digital platforms, including for ride sharing, short-term property or room rentals, or skills on demand. The ATO has also warned gig workers it is data-matching earnings from accommodation sharing and ride-sourcing platforms.
Find out more at https://www.ato.gov.au/General/The-sharing-economy-and-tax/
New Zealand’s Tax Working Group reported in 2018 that Internal Revenue has made adjustments to the tax withholding system to address compliance by self-employed workers and dependent contractors. The New Zealand Ministry of Business, Innovation and Employment publishes guidelines for gig workers and tax, including a note that many casual workers are classed as sole traders.
The Gig Economy: The complete guide to getting better work, taking more time off, and financing the life you want by Diane Mulcahy.
It offers practical strategies to take charge of your career while undertaking freelance and contract work.Download from CA library