Expanding the Social Safety Net in the Gig Economy
The numbers on a tax form don’t make a worker any less prone to suffering debilitating workplace injuries.
The modern workforce has seen a dramatic shift away from the salaried 9-5 employee and towards independent contractors. Their industry ancestors spent the better part of the past century fighting for protections, but because this new wave of contingent workers aren’t technically employees, they can’t reap the benefits of those efforts. The numbers on a tax form don’t make a worker any less prone to suffering debilitating workplace injuries. Unfortunately, they do often mean the worker will have to face them alone. Most independent contractors don’t receive protections like workers’ compensation, and over half of contract workers receive none of the benefits an employee in their field would. As the gig economy continues to grow, it’s imperative that gig marketplaces, and ultimately society, provide adequate replacements for the social protections built into employment.
One solution that has emerged as an alternative to workers compensation is occupational accident insurance (OAI). While workers’ compensation wasn’t designed for 1099 status workers, OAI is an equitable replacement with the flexibility and affordability to adapt to the contingent workforce. The coverage protects businesses from lawsuits, but its main function is to provide a safety net for workers who would otherwise be left to deal with crippling medical bills and lost wages alone. Gig workers are hard-working people who want, need and deserve protection. Companies at the vanguard of the gig economy have begun to acknowledge this with the adoption of OAI, providing a level of safety that many assumed 1099 workers would never attain. “The new workforce remains virtually uncared for and under-protected despite its growth and significant economic contribution,” says Carisa Miklusak, co-founder and CEO of tilr. “This is not sustainable and must be solved for. OAI is a step toward building a maintainable approach.”
Occupational accident insurance has existed for years in the trucking industry, but flexible programs that fulfill the needs of contingent workers didn’t emerge until quite recently. tilr is now partnered with Bunker, a company that has spent years working with leading insurance carriers to design a usage based (down to the hour), on-demand option that protects both the company and the worker without racking up excess fees. In 2018, the product became available to Bunker Members and has been successful among proactive marketplaces looking to provide a platform that’s safe for everyone. Early adopters of Bunker’s OAI cited the need to create communities that their workers could be proud of, which necessarily meant having their backs in times of need. As Miklusak put it, “A cared for worker is a more productive worker.” By April of 2018, Bunker had provided hourly coverage for over 45,000 gigs across a variety of platforms. Providing occupational accident insurance is a strategically savvy decision as well as a morally sound one.
Gig marketplaces function on the assumption that when a customer has a need, a worker will be there to fill it. As more and more platforms begin to populate the same space, both workers and customers have the option to choose where they spend their time and money. Imagine trying to get an Uber if 70% of the drivers in your city suddenly decided to work exclusively for Lyft. Offering OAI makes platforms like tilr stand out against the competition, by maintaining their role as an ethical leader in the space.
As more and more of the workforce becomes independent, the social safety net protecting workers will have to expand and adapt. This means reimagining employee benefits including and beyond workers’ compensation. Some suggestions have included portable benefits (which would allow gig workers with multiple contracts to accumulate benefits as they move between jobs), and reconsidering whether two categories can adequately describe the unique situations of today’s workers. The adoption of OAI shows that businesses are willing to take steps in that direction. If innovative companies continue to prioritize the humans that make up the gig economy, the Future of Work will be a safe place for everyone.
Bunker is removing insurance as a barrier to the future of work by embedding it into the contracting process. Usage based business insurance products allow freelancers to easily and affordably purchase the exact coverage they need, at the moment they need it. Our revolutionary Occupational Accident Insurance (OAI) offers hourly protection for gig workers at a fraction of the cost of Workers’ Compensation policies. We’re helping shift the workplace landscape to make way for the gig economy and the future of work!