Promoting the Freelance Economy

The US Department of Labor has redefined the rules surrounding what employees can be considered exempt. This redefinition requires that employers have newly declared nonexempt employees accurately record time worked on a daily basis. At the same time they are clamping down on use of independent contractors. Both of these actions fly in the face of the new way to work that is being used by companies like Uber, Lyft and Taskrabbit. The government seems to be receding instead of moving forward to embrace new methods of employing and keeping employed workers. What can be done? I came across one suggestion that I liked.

Flexibility Is Needed

Marco Torregrossa, Secretary General at the European Forum of Independent Professionals, writes on the website EurActive.com that much can be done to help support freelancers or independent workers. Torregrossa says that “To achieve the full potential of this emerging shift, policymakers must have a more heterogeneous and less monolithic understanding of an evolving independent workforce and begin shaping solutions that reflect this new reality of work.” He suggests this for the EU, but his advice is just as relevant, if not more so, for the US. He says that governments need to think differently about independents, or solopreneurs as he calls them, even differently from SMEs (Small and Medium-sized Enterprises.) He even goes so far to call for solopreneurs to “be given access to social security programs, training schemes, funding instruments and tax benefits that are too often unavailable to solopreneurs without steady pay packets and with variable income streams.”

Innovation Zones

Much like other work zones that have been created to foster company or job growth, one idea that Torregrossa has that caught my eye was his idea of innovation zones. As he says “Businesses and local authorities should co-create innovation zones to experiment with flexible work arrangements.” States or cities could create zones that would allow independent workers to work with businesses under different arrangements than current law allows. These innovation zones would allow independent workers and business to experiment with multiple ways to work together and not have to worry about IRS or DOL or state regulations that would penalize both parties for the arrangements. He says:

They should support the development of local platforms letting companies use freelancers without fear of liabilities if they might later be reclassified as employees and use big data to monitor trends. HR agencies, financial actors, public and private intermediaries should upgrade their services to sustain workers’ transition from project to project, platform to platform and into different career paths.

This would allow companies, workers and governments the opportunity to reinvent the world of work. We are moving down that road very quickly and we need to try to find ways to promote this adaptation. Torregrossa tells us that NYC for one is prime for adaptation. He says “The rush hour is dying. New York City’s subway system has announced that, for the first time in 30 years, “weekday growth was strongest outside of the traditional morning and evening rush hours”.  This is because people are beginning to abandon the conventional commute to a 9-to-5 job, so they can live and work autonomously.” If this is not a clarion call for rethinking how we work and the role of government and businesses will play in that then I don’t know what would be.

Need for Forward Thinking Government

I am hoping we can get some forward thinking politicians and bureaucrats to look for alternative ways to deal with the increasingly larger population of independent workers. Perhaps it will happen in Europe first, following Torregrossa’s lead, because there is a different opinion of some of the social support nets that need to be set up than there is here in the US. I would like to see the US embrace this kind of change driven by businesses and the independent workers, but I am not going to hold my breath for that long.