Estate Planning In A Gig Economy

We’re living in a “gig” economy. That means that new jobs and positions are most often filled temporarily. The number of contracted jobs is skyrocketing, and these contracts usually take place and dissolve over the short term. Part of the reason behind this rapid transition in our economy is the underlying social structures on which we rely. With the rise of high speed internet and the popularity of the smartphone, we can work from almost anywhere.

Such a transition has consequences.

Consider, for a moment, relatively new entities such as Uber. The company doesn’t consider its workers employees. Those on payroll are instead taking up contracted positions, and therefore don’t enjoy any of the added benefits that employees working for other enormous companies might enjoy. No insurance. No sick time. No retirement options.

When we plan for the future, many of us spend time on the estate tax planning process. When we pass away, we leave our heirs an inheritance. Our assets don’t just disappear–they get left behind. The dream is simple: over time, our family’s wealth should grow.

That isn’t always the case. What if you have no inheritance, and you have no assets with which to leave your children after you’re gone? This is the way it goes for many Uber drivers who can only barely afford to make ends meet. An optional Uber program tries to mitigate the damage by providing access to a few benefits by allowing its independent contractors to pay a portion of the cost per mile travelled during rides. On the face of it, that’s not much different than employers who provide optional health insurance for a percentage of each paycheck. Even so, the program isn’t very popular, and a number of drivers would like to see Uber and similar companies do more for the little guy struggling to make ends meet.

That’s why some organizations have proposed a tax on those companies and corporations contributing to this transition into a gig economy. Uber and similar companies that push us into a gig economy would be charged a portion of each transaction. Similar to disability or unemployment benefits, that tax would then go into an independent fund that workers could use for benefits even as they go from job to job.

In order for this endeavor to be made a reality, new legislation is required. The organizations fighting for the tax freely admit that progress is unlikely if the choice is left up to Uber and the companies just like it.

For now, the Independent Drivers’ Guild is spearheading the movement to implement legislation that would impose this tax. The organization is currently discussing the matter with elected officials in NYC. If such a bill could be passed, it could cause a domino effect around the country, as there are similar discussions occurring all over the place.

Because the economy is transitioning into one that relies heavily on independent contractors, governments would be foolish to ignore the needs of the people who rely on steady income and benefits to support their families. Without new legislation, our society could be headed into dangerous territory in which more people have fewer options they can choose to prepare for the future.