Independent or gig work consists of income-earning activities outside of traditional, long-term employer-employee relationships. We know what it is not. But what is independent work? What types of work does it include? Before diving into numbers, it is important to consider the different approaches to defining this workforce.
Approaches to defining gig work
Some definitions are based on the work arrangement: the contract or relationship between workers and the individual or company who pays them. Traditional workers have a long-term employer-employee relationship in which the worker is paid by the hour or year, earning a wage or salary. Outside of that arrangement, work tends to be temporary or project-based; workers are hired to complete a particular task or for a certain period of time. In some cases, they have an employer, but the company that pays them is different than the one at which they work. These types of arrangements are often called alternative or non-standard work arrangements, and may include freelancing, temp agency work, self-employment, and subcontracted work.
Other definitions of independent work center on the tax status or legal classification of workers: the difference between employees and independent contractors. Employees receive W-2 forms from their employers, who are obligated to provide them certain benefits, to deduct payroll taxes, and are covered by minimum wage and anti-discrimination laws. In many cases, temp-agency and subcontracted work is W-2 work, but the W-2 is issued by the contracting company rather than the company where the worker reports to work. Independent contractors, by contrast, receive 1099 forms when they perform services for a company without being a direct employee. Payroll taxes are not deducted, and neither party is covered by the same rules and regulations that apply to traditional employees.
Finally, some definitions are based on the nature of work: on what people actually do on a day-to-day basis. These definitions look at particular characteristics of work, such as scheduling, flexibility, or lack of direct oversight. Given the diversity of independent work, these characteristics may be seen as positive or negative.
These different approaches to defining independent work overlap. Nonstandard arrangements are often classified as independent contractors with 1099 tax status, and often have unpredictable schedules -- but not always. Therefore, different definitions lead to different estimates of the independent workforce. Surveys most commonly ask about work arrangements, but each definition offers important insights into the gig economy, and findings from all three are presented in the Data Hub.