The Internal Revenue Service (IRS) does not distinguish between gig workers and independent contractors. It classifies these workers as “self-employed individuals” who earn income by selling goods or services on their own behalf. The relationship between a self-employed individual and a company is often project-based—the job ends when the project is completed.

Some gig workers are temporary or contingent workers, though some are fulltime, taking on a range of projects from different companies. Few gig workers use gig work as a primary source of income; many have a regular full- or part-time job and use gig work as a side job. Overall, gig workers in the U.S. work in both traditional and digital workplaces; constitute a sizable number; and cover the gamut across age, education, demographic, and skill categories.

Gig economy workers do not receive a salary as workers do in traditional part-or full-time jobs. They typically invoice clients upon completion of their work, billing via an hourly rate (the time it takes to complete a project); fixed price (charging for goods or services delivered regardless of how long it takes to complete the project); and mixed (invoicing to cover the scope of the project plus charging for the cost of raw materials or hourly costs for labor).

Since many workers in gig work are classified as independent contractors rather than employees, as independent contractors they typically lose rights to a minimum wage, overtime, a safe and healthy work environment, and protections against discrimination and harassment. They also lose access to unemployment insurance, workers’ compensation, and paid sick leave now required in many states.

See: Gig Economy