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Importance of Compliance in the Gig Economy

Laws have always emerged from the employment trend and the challenges that these new employments brought about

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The industrial revolution of the 18th century started the trend of mass manufacturing and organized jobs. It also brought with it laws to govern the excessive work hours and stressful environment in the industrial workplace. .

Laws have rapidly changed since the days of the Industrial revolution. Post World War II, The labour market was stable with employees getting stable employment wherein they would retire from the company that they would join. With the Generation X, it was common to see employees change jobs every 5-6 years due to the availability of opportunities. We now see a marked transition where millennial employees prefer more short term assignments and change jobs frequently even every year.

With the increased availability of high speed internet, companies are increasingly shifting to virtual offices, short term assignments and freelancers to manage demand, increase productivity and cut costs. Many employees also have taken to freelance work through sites such as up work and many other online staffing platforms. While the employment trend has been changing rapidly, the employment laws haven’t moved at the same pace though. The new age HR team is facing challenges to treat employees of the Gig Economy with laws that were built to address the issues of the employment trends about 4-5 decades ago.

Challenges in the New Gig Economy: Working freelance or on short-time assignments is good as long as the economy is stable. Things can get bad if the economy is not going at the pace that we expect it to.  Also since the engagement is short there can be various misunderstandings which will result in cases being referred to Labour Laws. here are some challenges that organizations can face and suggestions on how they can be compliance in the new Gig Economy:-


Compliance Solutions

Incomplete understanding of the work and employment engagement: Since such employees have not been with the organization or with the product cycle, their understanding of the requirement can be very basic.

Have a clear contract signed with the terms of engagement and exact work required from the Short-term assignment or Freelancers. Get to the minutest details of delivery so that the person being engaged is completely aware of the work and quotes accordingly. Also, the nature of employment should also be mentioned clearly establishing the relationship between the employer and the person being contracted is clearly defined

Incomplete Delivery of  Work: If the work order has not been clearly defined, there is every possibility that such employees can deny to that small extra bit which is required to complete the work satisfactorily. They will claim to have completed the work whereas you may feel that they haven’t delivered.

Generally such employees are keen to take on work that is coming by and may quote low and take the job. You may feel the process is also shorter. However, if the person is not experienced , they might end up not delivering the complete work, especially if your requirements is something meticulous. Including ensure KPIs and SLAs as part of the original contract will be a better way to manage such situations as the person being engaged is aware of how their payments will be done.

Social Media Outburst. if they are not treated well or not paid if they don’t deliver: Since these employees don’t believe in long term employment, they are more free to go online and speak bad about the organization even though the organization was not at fault in case there were different expectations from the contract

Although everyone has the right to freedom pf speech, it’s always better to put a clause around disclosing the engagement on social media for both parties. The clause be more of an education in the beginning of the engagement so that both parties are aware of what they can or cannot do for a longer professional engagement

Extra Work :  You cannot expect exceptional delivery from such mode of employment. They will only deliver what is described in the contract. So you cannot expect them to deliver an obvious simple feature that you oversaw during drafting the contract. The person may quote exorbitant rates for the extra work since they have already completed most of the work

The best way tackle this is to build a clause to cater for additional work right at the beginning and the payment terms for the same.

While we have discussed some of the most basic issues that companies might face, there may be many other issues related benefits, Work Environment etc. that will crop up during the course of the engagement. The best way to stay compliant and not get into trouble is the golden rule of ensuring all clauses mentioned in the Short-Term Assignment or Freelancing Work should be above the basic minimum prescribed as per existing Labour Laws of the land. In case, the issue gets referred to any courts, the measurement most likely to be used by the courts will be the existing Labour laws and your organization will be in  a safe zone to protect the organization’s interests.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

Tags assigned to this article:
employment gig economy freelance work

Anil Prem D’Souza

The author is the founder and CEO of Simpliance.

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