Is Automation Helping Your Workforce Management or Leaving You Open to Risk?
AI and automation are changing how teams manage contingent workforces — but they can’t replace human judgment on classification, compliance, and payroll.
Employee classifications identify how the Fair Labor Standards Act (FLSA) apply to workers and what benefits they are legally entitled to or not. Because of this, the language we use around it matters! The terms we use to define workers can get thrown around interchangeably even though they’re actually different. Let’s define the language around independent contractor, gig worker, and employee.
Merriam Webster defines the gig economy as “economic activity that involves the use of temporary or freelance workers to perform jobs typically in the service sector.”
The service sector piece is one of the main cues that indicates someone is a gig worker. Ride-sharing drivers and grocery delivery people are good examples. Their “gigs” are on-demand. It usually goes something like this: a customer coordinates a one-time service (such as a grocery cart full of food delivered to their doorstep) through a company like Uber or Instacart. They facilitate the transaction through an app and a worker accepts the task.
The gig worker, then, is the person who does the driving or shopping/delivering. They might also be an independent contractor, but it’s not the same thing.
Independent contractors are business owners who engage in a contract (either with another business or with an individual) to provide a service. They receive payment specifically for the work they perform and according to agreed-upon terms. Unlike a regular employee, they can pick and choose clients and regularly move from client to client.
Here are some of the key hints that someone is an independent contractor:
Okay, so employees are a whole different thing. In short, they’re employed by a company and are entitled to the benefits and regulations that go along with that. There are multiple designations that can apply to employees–part time, full time, exempt, non-exempt. We’ll go into more of that next week.
Let us help you. It’s our business to keep clients compliant.
AI and automation are changing how teams manage contingent workforces — but they can’t replace human judgment on classification, compliance, and payroll.
There are many perks of hiring independent contractors, including being able to: Outsource tasks not core to your business Engage workers for specific, short-term, or highly specialized tasks End engagement whenever it makes sense Avoid much of the onboarding hassle Avoid paying a premium for benefits Engaging independent contractors is very appealing, but is only […]