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 y...