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The on-demand or “gig” economy is rapidly changing the lifestyles of workers and consumers, often in good ways, but protections in place for people earning or supplementing their income in the sector need to be reviewed and updated.
The ability to tap an app to secure a ride, book a room, get some help moving, buy groceries and other things is transforming how we obtain those services and providing full- and part-time work to numerous people.
For consumers, it offers convenience and savings, as many of the gig economy services are provided at a substantially lower cost than old-economy rivals — although a recent $58 charge I paid for 4.4-mile ride via a ride-sharing app back to a price-inflated apartment obtained via Airbnb at the holiday peak shows that the supply-and-demand curve reaches well into the shared economy, too.
Workers can choose their hours, obtain extra income when they need it or work full-time for one or a combination of the gig economy companies. But as independent contractors, what they can’t do in many cases is receive workers compensation benefits if they are injured on the job. And given that many of the jobs in the gig economy have higher-than-average worker injury rates, that’s a problem that needs to be addressed, preferably by policy rather than litigation.
Already, things are changing. As we report on page 11, a grocery service was recently ordered to pay workers comp premiums for its couriers, which it had classified as independent contractors. While the company is contesting the decision, this is not going to be the last case where a gig economy company is going to face pressure to offer workers comp benefits.
Given the varied, state-based workers comp systems that the companies deal with and the nontraditional employment structures they use, there may not be a straightforward solution to the problem. One suggestion that has been advocated by some workers comp experts is to introduce a new category of worker, dubbed “independent workers,” that would be eligible to receive at least limited injury benefits.
If a solution isn’t found, injured workers will get expensive emergency room treatment for nonurgent ailments, and we’ll all end up sharing the costs.
There are some high expectations ahead for the incoming administration.