Classification Challenges Involving Use of Independent Contractors in the US Workplace

December 2021Employment Consultant

Abstract

The independent contractor workforce is a rapidly evolving component of the U.S. economy that has significantly increased in recent years. Even before COVID, independent workers were a growing part of the U.S. labor force. According to the US Bureau of Labor Statistics (“BLS”), there were about 9.6 million self-employed workers in 2016, a number that is projected to increase to 10.3 million by 2026. In September 2018, the BLS released its estimate that that 990,000 workers (0.6 percent of the workforce) do electronically mediated work where they provide services in person (working for companies like Uber, Handy, TaskRabbit, etc.). In 2019, around 41 million Americans were classified as gig workers. COVID-19 has only accelerated this gig economy use of independent contractors. Tech-mediated gig work is the latest trend of “nonstandard” subcontracted, temporary, on-demand, or freelance work. A 2020 Upwork study suggests that 24% more people entered the gig economy during the summer of 2020 than in previous years.

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Classification Challenges Involving Use of Independent Contractors in the US Workplace

Abstract

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