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Legal Problems Involved in Gig Economy

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On the surface, the gig economy appears to be a great mode of employment. When put under scrutiny, though, the gig economy reveals a number of downsides.


The gig economy seems to be taking over the world. This relatively new employment mode is backed by technological advancements, and it looks like it is here to stay. The idea of a temporary job opportunity is appealing to both companies and gig workers. While companies benefit from temporary employees and prompt workforce scaling, gig workers are drawn to flextime and an opportunity to compile a diverse portfolio of clients.

According to gig economy statistics, more than 50% of US employees are likely to participate in the gig economy by 2027. Interestingly, 76% of workers who have already been partaking in the economy claim that they are happy with their choice. While the gig economy has already taken over multiple industries, starting from the education, manufacture, and legal sector, numerous issues are to be addressed before the gig economy expands further.

Multiple Clients: A Double-Edged Sword  

While a diverse client portfolio speaks volumes about one’s expertise, it can be a primary cause of a severe headache. Many gig workers jump from one client to another, looking for a specific connection and a somewhat steady job opportunity. Once they get their hands on one, they might face taxation problems.

Perhaps, most issues arise when one gets to do taxes single-handedly. In most cases, gig workers tend to spend most of their time building up their client base, which translates into diverting attention from doing taxes. Thus, many workers end up forgetting about taxation to the point of no return. In other words, if a gig worker

has over $400 net self-employment earnings and they do not file their taxes every quarter, they might be subject to a penalty at the end of the year. The best piece of advice here is to find a professional accountant who knows the inner workings of gig employment. That is the most straightforward way to ensure that you are on the safe side.

Unclear Employment Status

Getting a gig is great, but upon closer inspection, one could discover that there is no clear employment status. Gig workers operate in a gray area, meaning they often do not get a standard set of benefits. Instead, they have to deal with arising health and social security concerns on their own. This type of employment status also affects how a gig worker has to file their taxes. Aside from potential taxation problems, employers may often breach a contract and harm employees because of it.

A breach of contract may happen at any gig, and it’s usually a sign that an employer is not transparent. What’s more, employers do know that gig workers will have numerous problems with seeking legal guidance. Beware since clients often alter agreements or put an end to a contract before its due date. That’s why gig workers are advised to hire a lawyer who will oversee contracts with one’s clients. By doing this, you will ensure that you are not getting the short end of the stick, and should anything go south (should you experience a breach of contract), you will get compensated.

Payment Problems

Nearly 74% of gig workers would leave the marketplace because of payment problems. As many as 29% of respondents reported instances of not receiving payment, and 27% claimed their payments were late. Some gig workers decide to register as business owners. It’s easier to claim payments as a business, and taxation rules are more straightforward. That said, they tend to forget to protect themselves legally, which leads to payment issues. Sometimes a client goes as far as denying a payment, and gig workers are then left with empty pockets and not a single chance of fighting back in proper legal settings.

If a gig worker is hired online, via a platform, in most cases, they are protected by a corresponding escrow. A third-party platform can help workers manage cooperation with multiple clients for a certain fee. If a gig worker decides to leave a platform, they might save up on fees but get in hot water with some international clients since missed payments or lack of payment methods might become an insurmountable obstacle.

PayPal is possibly the best way to charge clients, both locally and globally. Gig workers who deal with offline jobs can also sign a contract that guarantees a certain percentage of upfront payment.

Less Than a Minimum Wage

The market is vast, and competition is ever-increasing, making some gig workers drop their prices to appease more potential employers.  Eventually, if enough gig workers are willing to get paid less, the whole market suffers. Many end up working for less than an hourly minimum wage, which inevitably affects other areas of their life.

In early 2019, the US Congress and 16 states introduced legislation that requires that all workers get paid full miniumum wage plus tips. It’s yet to be seen how this legislation will affect the gig economy, and if it will succeed in enforcing all companies to follow through.

Click on the graphic below for more interesting facts and statistics.

Graphic: What Do They Think About Gig Employment? Courtesy of author.
Graphic: What Do They Think About Gig Employment? Courtesy of author.

Summary

On the surface, the gig economy appears to be a great mode of employment. When put under scrutiny, though, the gig economy reveals a number of downsides. Since there’s no clear employment status, gig workers lack social benefits and often deal with a breach of contract or missing payments. What’s more, since there aren’t many regulations in place, there’s not much gig workers can do to fight for their rights.  All in all, the gig economy has enormous potential, but the mentioned legal issues most certainly need to be solved along with its growth.

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Food delivery deaths show why gig economy workers need more rights

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Australia’s gig economy road toll is growing, with five food delivery riders killed in the past two months – and those tragic deaths have ignited debate over the rights of workers.

While the companies behind the apps rake in pandemic profits, workers’ advocates warn we will see more delivery riders die and be injured on our roads, with limited rights to compensation if nothing changes.

Hungry Panda delivery rider Xiaojun Chen died after being hit by a bus while delivering food in Sydney on September 29.

Last week, representatives of the firm failed to front a NSW parliamentary inquiry looking into the death, with no explanation given.

Mr Chen’s widow, Lihong Wei, was told by Hungry Panda that they considered her husband to be an independent contractor, not an employee, so she would not be entitled to compensation.

Slater and Gordon lawyer Jasmina Mackovic is now representing Mrs Wei and pursuing a death-benefit claim under the NSW workers’ compensation scheme.

“They’ve lost the breadwinner and they don’t want this sort of thing to happen to any other family, especially given the state of that industry, and the fact that there’s all these loopholes, and there’s really no proper compensation,” Ms Mackovic said.

Mr Chen was the sole income earner for his family back in China, and his death has left Mrs Wei to support herself and their two children with no guarantee of financial compensation from either Hungry Panda or the state government.

Like many gig economy workers, Mr Chen was a migrant on a temporary visa.

These workers are not entitled to the federal government’s pandemic safety nets JobKeeper and JobSeeker, and they have little option but to take on low-paid, insecure and risky gig economy jobs to survive.

Gig economy companies have a history of pouring large sums into lobbying against workers’ rights.

In California, Uber and Lyft recently spent more than a-quarter-of-a-billion dollars to successfully fight law reform that would have seen gig economy contractors classified as employees.

In September, a Transport Workers’ Union survey of delivery riders in Australia showed that average earnings after costs were just over $10 an hour.

More than one in three riders said they had been injured on the job, with the vast majority (80 per cent) receiving no support from their companies.

The NSW government this week set up a taskforce to investigate the four delivery rider deaths on the state’s roads in the past two months.

Delivery riders in Australia earn an average of $10 an hour, the TWU says. Photo: Getty

But gig workers’ rights are a national issue and need to be addressed by both federal government and state governments, Ms Mackovic said.

“Both state and federal governments have a role to play to ensure that these companies don’t avoid their responsibilities, and to ensure they adequately protect the people that work for them,” she said.

Transport Workers’ Union national secretary Michael Kaine also called for the federal government to step in and “acknowledge its role”.

“It’s not good enough that states are in a piecemeal way trying to address the problem,” Mr Kaine said.

“We need the Federal Government to act and regulate.”

Hungry Panda did not respond to questions put to it by The New Daily.



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Pearl Thusi Bags A Huge Gig After Getting Booted Out Of Netflix

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Pearl Thusi Bags A Huge Gig After Getting Booted Out Of Netflix, She Has Partnered With Yvette Davis’ Sitota Collection

Pearl Thusi Bags A Huge Gig After Getting Booted Out Of Netflix. She Partnered With Yvette Davis' Satota Collection
Pearl Thusi Bags A Huge Gig After Getting Booted Out Of Netflix. She Partnered With Yvette Davis’ Sitota Collection

It seemed like a dead-end for Queen Sono lead actress, Pearl Thusi when the show unexpectedly got booted out of Netflix’s streaming service amid production for season two – but sis fell, stood and brushed herself fast enough.

She bagged herself yet another gig and continues to secure the bag.

She has partnered with American legendary music industry’s biggest icon, Yvette Davis Gayle to produce a new luxurious home fragrance, called the BlackRose under Sitota Collection.

Sitota Collection is one of the big home fragrance companies in America and abroad.

They boast in producing hand-poured soy candles and artisan soaps made with natural oils and kinds of butter.

The new fragrance is said to combine Bulgarian rose with blackcurrant and sweet berries.

Speaking on her recent big win after the Netflix flop, Pearl Thusi said the opportunity came at a right time for her and has always been a dream of hers to get into such business.

“The partnership with the Sitota Collection came naturally and it felt right. I am a businesswoman and venturing into luxury home products has been a dream of mine, who better to partner with than the best in the business?

I can’t wait for the local community to experience what we have put together. I feel this is my full-circle moment.

The collaboration is incredible because the soap and candle used my favourite scents and ingredients,” she said.

Yvette Davis Gayle is one of America’s legendary music icons.

She is well known in the musical circle for overseeing the day-to-day media and public relations efforts for such standout recording artists as 50 Cent, Mary J. Blige, The Game, Diddy Dirty Money, Keyshia Cole, and Keri Hilson as well as various artists that graced the rosters of Aftermath and G-Unit Records back in the day.

She ventured into the fragrance collection business back in 2011 and her company, Sitota Collection has won her a fortune.

Pearl Thusi Bags A Huge Gig After Getting Booted Out Of Netflix


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Gig economy: Panacea or a silent killer?

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Image Credit: Agency

You probably never heard of Jang Deok-jin. And now you never will, because he’s dead.

27-year-old Jang, a former Taekwondo enthusiast in South Korea, was of the millions bit by the bug of the ‘gig’ economy — the new-age system typified by the prevalence of short-term contracts or freelance work as opposed to permanent jobs. The biggest employment this has created is in the online marketplace — where millions of bike or vehicle drivers deliver packages of goods bought over the internet.

No doubt Jang thought that this would help him earn big bucks. He did, for a while. In the process, he lost 15kg after doing 18 months of night shifts, according to a BBC report. One night, he came home from a night shift last month at around six in the morning and headed for a shower. His father found him dead an hour later.

Master-slave. Landlord-serf. Bourgeoisie-proletariat. And now — Aggregator-partner.

By whatever name you choose to call it, throughout human history, the relationship between the oppressors and oppressed has always remained the same. The terminology may have changed over time, the levels of oppression may have varied, but the essence of the relationship still continues as they have been through the millennia — a miniscule group of people calling the shots, and the starving millions toiling for their lives to eke out a meagre existence.

We all thought it was a momentous event when the ‘Iron Curtain’ of communism came crashing down three decades ago. The 1990s were heralded as the beginning of a new epoch of liberty, human rights and prosperity, as the stifling conditions of the communist bloc gave way to liberal democratic regimes, championing the free market and industrial progress.

But are we really free?

With the advent of globalisation, free movement of goods followed as a natural course. The companies’ profits also ballooned as a consequence. As a result of globalisation, the factories moved from the industrialised states to countries where labour was cheap and plentiful, and more importantly, less likely to complain about low wages. So, while the workers in the West lost their jobs, the workers in the East gained employment under poor conditions. The classic example of this situation gained worldwide attention in 2013, when Rana Plaza, a building housing garment factories in Dhaka, Bangladesh, came crashing down, killing over 1,100 people, who were all sewing clothes for multinational brands.

Let us take a peek into the moulded pages of history to gauge how the present situation has come about.

In the 18th century, as the global economy was moving from an agricultural dominance towards industrialisation, it also became necessary to get the labour for the factories. The so-called ‘emancipation of serfs’ was nothing but a ruse to take the farm workers away to the assembly lines. The worker’s wellbeing was the last thing on the mind of those championing their liberties. It is no coincidence that the French Revolution — 1789 — occurred just 25 years after the first cotton mill opened in England.

As the factory owners pounded the labourers with more and more work, the issue of labour rights began to come to the fore — championed foremost of course by German philosopher Karl Marx. This explosion of the communist movement saw rising demand to improve workers’ rights, and increasing popularity of left-leaning movements.

As these movements caught on, it was in 1936 that France became the first European country to grant paid vacations for working class employees beyond national and religious holidays, with the post-war consensus steadily expanding those privileges. Other Western countries followed suit, establishing the social security network that forms the bedrock of social organisation at present in those nations.

However, by the end of the past century, two global events shook the very foundations of society as we knew it. One, the communist block crumbled, effectively removing the opposition to unfettered capitalism. Second, the advent of the internet ushered in a new world of connectedness like never before.

New ideas exploded. And as a natural consequence, new industries too. With the Fourth Industrial Revolution under way, a plethora of new work opportunities resulted. It was thought to be the ultimate panacea — knowledge-based industries.

And so it did — for a while and in some places. But then, the dark clouds gathered.

As it is with globalisation, manufacturing had largely moved from the assembly lines of the Western nations to cheaper locations in the Eastern hemisphere. The same happened here as well — with distances no barrier, companies moved a major part of their operations to similar places. A new term — ‘Bangalored’, referring to the city in India — made its way into the English lexicon, which refers to a person losing his/her job because that position was outsourced somewhere else. The ‘Business Process Outsourcing’ companies flourished in the less developed countries as a result, India being a major gainer.

But did it really mean the people working in these countries go better off, at least economically? For a while, yes. You suddenly saw 20-somethings with no skill to speak of but a rudimentary knowledge of computers and a smattering of accented English break out in the socioeconomic space, buying apartments, fancy cars and bikes. However, as this group reached the next decade of their lives, it was increasingly seen that they remained stuck to those positions. There was hardly any movement up the corporate ladder, and with unearthly working hours thrown in, the situation quickly became desperate.

And then came the ‘gig’ economy. The internet-based businesses were hailed as the solution to the masses being laid off due to the blue-collar jobs vanishing. But as the millions of bikes rode out to deliver parcels, the stark aspects of this new phenomenon —zero holiday pay, and employment only when there’s work available — became increasingly visible.

These are now becoming the default employment terms in what’s now considered the developed world. Governments have struggled to create a safety net of the same strength for this workforce as that being provided to people in traditional employment models, which is becoming increasingly scarce. This insecurity “has likely led gig economy workers to continue working, even when they perhaps should not, as the alternative risks substantial shortfalls in income,” Lazard Asset Management wrote in a recent note.

Thus the entire globe is increasingly moving towards an informal employment model, where there is unlikely to be any form of permanent labour benefits. This is bound to have ripple effects — not just for workers’ health. For example, if a worker does not find stable employment, will he/she think about setting up a family? How is he/she to support such a family without the knowledge of what he might be earning in the near future? Without a social security net, how will the children be educated? Without company-provided insurance, how will the health care of the workers and their families be taken care of?

No concrete answers have yet come up on these questions. Movements have begun in parts of the world for greater rights for these ‘partners’ in the gig economy, but hardly anything has been achieved yet. And the COVID-19 pandemic, of course, has worsened conditions for these workers while beefing up the ‘aggregator’s’ bottomline.

So the next time you sit in the cocoons of your home, sitting in front of your laptop and order that next round of food or anything else from the ‘aggregator’s’ website, spare a thought for the ‘partners’ like Jang Deok-jin, who gave his life in the process.

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