Employment expert explains why more workers are freelancing…but is it a good idea?
The amount of people relying on freelance gigs for their sole salary has increased steadily in recent years. By 2021, over 9 million Americans are expected to be part of the country’s ‘gig economy,’ in which workers cut ties with companies and work for themselves. And, President Trump’s new tax reform could hasten and increase this growth, but what impact could that have on workers and company growth?
“There is a provision in Trump’s tax law which will allow sole proprietors (including freelancers like Uber drivers, graphic designers, consultants, etc.) to deduct 20 percent of their revenue from their taxable income,” explains Rob Wilson, employment trends expert and President of Employco USA, an employment-solutions firm based in Chicago, IL.
Wilson explains that this tax provision could add up to thousands of dollars in savings each year. “In addition, this tax provision will be beneficial for bosses who are looking to save on payroll costs. By switching workers from salaried employees to contracted freelancers, they can save big…and workers will have less reason to complain, as they can earn more money under the new provision as well.”
However, freelancing isn’t always everything it’s cracked up to be. “Essentially, you’re losing your safety net if you become a gig employee,” says Wilson. “Along with losing employer-sponsored health insurance, you’re also going to lose unemployment insurance and workers’ compensation.”
The employment trends expert is also careful to point out that freelance workers do not have the same protections as dedicated employees when it comes to the Fair Labor Standards Act and anti-discrimination protections.
“Independent contractors will have a very difficult time when it comes to battling discrimination or sexual harassment,” says Wilson. “These are all very important things to consider before you go ‘gig.’”
For more on this topic, please contact Rob Wilson at rwilson@thewilsoncompanies.com.