The rise of technology has changed how many businesses operate; and in the last few years, we have seen the emergence of companies that rely on technology to distribute and govern contract work.
Welcome to the age of the “Gig Industry”, where independent contractors are connected with project opportunities through online platforms that govern transactions, work performance, reviews and ratings – all while earning either a portion of the contractor’s fee or a flat rate for them to connect to the service.
Organizations such as Uber (transportation), Upwork (design) and Airbnb (accommodation) are changing the face of how workers can control their employment. Contractors often have the benefit of a flexible schedule, and an ability to choose their projects. The potential downsides we are seeing are unregulated wages, exposure to economic fluctuations, no workplace protection laws, and no workplace benefits.
While companies are not obligated to provide benefits to their contractors, there are some organizations that still do. TappCar Inc., an Alberta ride-sharing company offers health benefits and participation in a pension plan that gives drivers a sense of “comfort and stability” according to spokesperson Pascal Ryffel.
The gig industry is growing, and as with any talent retention strategy, employers need to make sure that their process, compensation, and overall offering is competitive. As many contractors will have multiple companies they work for (the benefits of a flexible work balance), many companies do not offer benefits (as there is no way to guarantee exclusivity).
So what are the benefit options for people in the gig industry?
Professional Associations
Actra Fraternal Benefit Society is a non-profit insurance company that provides benefits to Canadian artists, whose benefits depend on how much they earn, since employers contribute to each member’s benefits plan whenever the artist books a gig. But for those artists who don’t work much during a particular year, they could lose their coverage. In that case, they’ll have access to individual plans, which the insurer also sells to artists who aren’t union members through other arts organizations. Non-affiliated artists can also participate if they can prove they’re working in the industry.
Health Spending Accounts
Setting up a health spending account, which would add a portion of earned gig income to a health account, is one way to ensure there is money designated for health and wellness.
Traditional Benefit Options
Signing up for a traditional health insurance benefits policy as a one person company can have expensive premiums; however, this option offers a wider range of coverage, diversifying the health risks.
Stride Health
Stride Health in the US works with employers of independent contractors to make it easier for their contractors to appropriate policies. The transaction is a win-win-win scenario; Stride Health receives financial data and demographic information, which reduces administrative tasks, and they then use the information to formulate health plans, and the contractor gets benefits with an ease of access and lower cost (as administrative costs are lowered).
We’re happy to go over similar options with contractors, or employers interesting in attracting quality contractors and freelancers. Please reach out with any questions.
