Ambition Redefined by Kathryn Sollmann

Author:Kathryn Sollmann
Language: eng
Format: epub
Publisher: Quercus
Published: 2018-10-10T16:00:00+00:00

Freelancers report their own income to the IRS and pay a 15.3 percent self-employment tax for Medicare and Social Security in addition to regular income taxes.32 If they are placed in the contract by a third-party agency, they receive a W-2 from that agency at the end of the year for hours worked (and they do not pay self-employment taxes for these hours).

Completely independent workers (called 1099 contractors) do not receive employee benefits. Agency-placed independent workers (W-2 contractors) often have access to a limited menu of benefits, such as a nonmatching 401(k) or a Flexible Spending Account.

Depending on the legal structure of an independent worker’s business, a home office may make it possible to deduct the actual square footage used for work. Routine deductions for all independent workers can include office equipment and supplies, use and maintenance of the car for business purposes, and even health insurance.33

Evidence that employers are migrating toward a flexible, on-demand labor model appears in the 2017 Workforce Productivity Report:

• Nearly all (96 percent) of the chief financial officers and line-of-business managers surveyed say they engage independent contractors.

• Eighty-three percent of these business leaders believe contract workers are more or equally productive as full-time employees.

• Independent contractors account for 21 to 60 percent of the workforce at half the companies surveyed.

• Seventy-two percent of business leaders believe the increase in specialized labor on demand is increasing company productivity.34

The skills that are always in hot demand for more seasoned consultants include marketing and communications, project management, business analysis, accounting/finance, and a wide range of information technology expertise.35 Working independently overall has become an increasingly viable and respected career option as employers see that they can choose the best talent from a wider geographic pool and save about 30 percent in payroll costs.36 The freelancing platform Upwork features job listings from 20 percent of Fortune 500 companies.37 Full-time freelancers work an average of 36 hours per week,38 and, at a time when “permanent” employment is tenuous, they feel more security depending on several clients rather than on just one employer.

A big development in the freelance economy is the passage of the “Freelance Isn’t Free Act” in New York City. The first of its kind, this legislation gives freelancers legal protection against wage theft. Companies are required to sign contracts with freelancers and double the wages if they are not paid on time.

Freelancers work in all industries, but there’s a growing need for on-demand help at companies focused on language services, research, education, marketing, insurance, journalism, and e-commerce.39 Also fueling increased demand are unemployment rates that are starkly lower than the Great Recession era. These rates have created “the recruitment market economy,” where employers like Apple, Calvin Klein, The New York Times, Airbnb, Google, and many other Fortune 500 companies are in competition for highly skilled freelancers.40

When freelancers have dry spells, matchmaking websites such as Upwork, 99 Designs, Freelancer, Guru, Elance, People Per Hour, and Fiverr make it possible for more than half of independent workers to find new projects in less than three days.

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