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The Gig Economy's Impact on Small Businesses

5 Ways the Gig Economy Affects Small Businesses

1. Recruiting an on-demand workforce

As gig work goes mainstream, many independent companies are recruiting individuals to perform fewer, but more specific errands. By hiring employees on a project-to-project basis, small companies will open their business to a wide pool of on-demand talent while liberating themselves from the commitment of long-term employment. 2. New considerations for legal compliance Most gig workers are viewed as self-employed entities — not employees. Entrepreneurs need to understand the legal distinction between the two and classify laborers accordingly. Employees and self-employed contractors are taxed differently. So organizations could wind up in legal hot water if a mistake is made. We suggest consulting a lawyer if there's any confusion. In any case, as a general guideline, the more limitations put on a contract worker, the more likely they are to be an employee. 3. Less overhead, more money in your pocket An entrepreneur is committed to remunerating gig workers exclusively for their time in exchange for a service. This implies entrepreneurs can reduce expenses related to contracting an employee, including: Salary Employee Benefits Retirement plan Sick Days off Paid Leaves Office space Equipment Payroll Taxes Depending upon the assignment, employing a self-employed contractor might be smart for the main concern. Consider the skills and time commitment required for each project and hire accordingly. 4. Virtual collaboration through computerized workspaces With applications interfacing organizations to contingent talent and cloud-based collaboration tools like Slack, Dropbox, and Google Drive, some traditional workplaces will advance into a computerized workspace. This makes an environment where gig workers can find and finish jobs anytime, from anyplace on the planet. 5. Gig economy protection that addresses your needs Regardless of whether you are an entrepreneur employing a contractual worker or a gig specialist doing your very own work, it's important to realize how to explore the insurance market in the gig economy. In case you're hiring a contractor, search for somebody who carries general liability protection. This ensures your small company if the temporary worker delivers disgraceful work, doesn't finish a task on schedule or commits any mistake that ultimately costs you. On the flip side, if you are a self-employed contractor representing yourself as your very own business, we encourage you to carry some type of liability or independent company insurance. This also exhibits an advanced level of professionalism and shows you pay attention to your work. What about the worker's remuneration? As an entrepreneur, if you have self-employed contractors working remotely or on location, you are not required to cover them under workers' remuneration. But, if a business has mistakenly classified a worker as a self-employed contractor, this could cause issues if injury or accident happened at work. See our above suggestion to consult a lawyer while classifying employees if there is any confusion.

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