Flexibility + Stability : On-Demand workers seek benefits but not employee status

We recently surveyed Peers community members about work and benefits in the on-demand economy, and want to share a few highlights. We received 255 responses, which means that conclusions should be more “directional” than gospel, but the data does offer an interesting perspective.

Overall, our community wants new types of support systems when working in the on-demand economy, that provide greater stability without sacrificing flexibility. In part, respondents promote creating a new employment classification for the on-demand economy.

Interestingly, though, the more hours per week respondents work in the on-demand economy, the less likely they are to want to be employees.

Respondents desire a broad spectrum of benefits, with health insurance, disability insurance, paid time off, and retirement savings topping the list.

As a tradeoff, most respondents (78%) were willing to commit to working a minimum number of hours per week in order to receive benefits, where 20 hours per week was the most common response.

Many companies limit the number of hours per week those classified as employees can work, in order to avoid additional government-mandated worker protections, such as overtime pay and contributions to health insurance premiums. However, only 40% of respondents are willing to limit the amount they would work, suggesting that reclassification to part-time employees may not be the best fit.

Respondents also need more education on existing benefits, like health insurance; as almost half of those who state they don’t have health insurance because they can’t afford it don’t know if they qualify for subsidies.

Half of respondents have two months of savings or less, so regardless of employment classification, respondents need access to a safety net to catch them when they can’t work for an extended period.

In summary, workers desire (and need) affordable access to benefits, and are willing to make certain concessions in order to get them, but many do not want to be classified as employees. Unfortunately, today’s employee classification and benefits systems do not fit this reality, and instead force a choice between flexibility and stability. Workers deserve more.

A continuing conversation has been taking place about ways to solve this problem, and has been led by the idea of “Portable Benefits” as discussed by David Rolf and Nick Hanauer, Sara Horowitz from the Freelancers Union, Steven Hill from New America, and yours truly. Supporters of Portable Benefits believe that benefits should be associated with the worker instead of the employer, which means a worker would not lose or need to change their benefits when they switch jobs (or apps). They also believe in universal access to critical benefits, such as workers compensation (or something like it, such as short-term disability insurance) which is virtually inaccessible to independent workers today. Another critical element is enabling multiple employers to contribute to the cost of benefits for a single worker. This helps to eliminate all-or-nothing contribution scenarios which make it easy to deny benefits to workers (Tim O'Reilly has written a detailed description of this issue which he calls the “29 hour loophole” here.)

These are clearly difficult issues to tackle, but it is an important conversation to have as the on-demand economy has enormous potential to offer our economy and society. At Peers we’re committed to creating solutions that provide all workers, regardless of employment classification, access to an affordable safety net. We invite you to join the conversation and the challenge.