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September 23 2021

Legal Needs in the Gig Economy

By: Curtis L. Underwood

There is no question that the modern marketplace is changing.  More and more of the work force is leveraging their unique skills and abilities as outside contractors or small businesses than in prior decades.  In fact, many estimates indicate that as much as a third of the United States work force operates in this new “gig economy.”

For many of these writers, photographers, independent marketing agents, models, influencers, personal trainers, and others, the object is to keep simple business model with low costs.  Needless to say, workers in this sector would like nothing more than to never need an attorney in their whole career. 

However, as is the case in many areas, being proactive with setting up one’s legal relationships can save a lot of money in the long term.  For example, many gig workers set up limited liability companies without understanding the implications of what sort of liability is and is not blocked by such an entity.  Many times, such an entity is not even necessary at all or is not being used correctly.  Further, as profits increase, the business owner may need to start interacting with how to set up employment or partnership relationships and engage in further tax planning considerations.

One of most important legal dynamics for gig workers is contracts.  While many such workers operate on handshake deals, this practice rarely goes on for long before the human propensity for misunderstanding corrects that behavior.  But what should be in a good contract? 

Contracts should be set up to put the worker in the best position to get their compensation while avoiding any ambiguity and disputes on the back end.  For example, does your contract have a waiver for disputes based on a timeline from when services or goods are provided?  Does it include an attorney fees provision for collections to make enforcement clear enough to avoid disputes beforehand?  Finally, does the contract clearly lay out timelines and standards for the services or goods to be provided.  These considerations and many more can make all the difference if and when a misunderstanding arises. 

Our attorneys specialize in preparing gig-economy contracts that help parties gain more clarity in the short-term and avoid disputes in the long-term.  For more information, please call 616-632-8021 and we would be happy to discuss our services.