Companies are relying more and more on contract and gig workers. If current growth rates continue, a little more than half of US workers will be freelancing by 2027, according to the “Freelancing in America” survey.
It’s easy to see why companies are increasingly leveraging gig workers: They tend to be cheaper than full-timers, they are available on demand, and they offer quick solutions to talent gaps. For example, if a web company has a short-term project to complete or a retailer is experiencing higher than average traffic, it could easily turn to the millions of talented candidates on the gig marketplace who can get the job done.
However, because gig workers don’t work as full-time employees, they aren’t entitled to the buffet of benefits and perks traditional employment typically offers. While becoming a self-made professional and taking initiative to find work wherever you can is highly alluring to the American spirit of independence, many workers are uneasy about the lack of a safety net in the gig economy. It is easier to depend on an employer for some things, health benefits among them.
One important benefit gig workers are usually missing out on is disability protection. If a gig worker experiences an injury or illness that puts them out of work, they may have very little support available to help get back on their feet. This is particularly concerning because despite an uncharacteristically low unemployment rate and rising salaries, Americans are still not saving as much as they should. According to a survey from Bankrate, a whopping 19 percent of Americans don’t save any of their income, and only 16 percent of them save more than 15 percent of their pay.
This means a large number of people are at risk of financial ruin should they experience an unexpected debilitating health condition that prevents them from working. Sadly, the odds of that happening are higher than one would think. The Social Security Administration estimates one in four 20-year-olds will experience a disability before reaching retirement. This is a risk that no one — especially not gig workers — can afford to ignore.
Setting Your Company Apart Through Disability Protection Benefits
Due to today’s tightening labor market, employers are the ones chasing talent, not the other way around. If an employee is unsatisfied or doesn’t feel protected on all fronts by their current employer, they can find a new opening much more easily than they could just a few years ago. Gig workers are especially mobile, as they rarely have long-term contracts or commitments holding them back from seeking employment elsewhere.
Thus, employers in all fields must offer higher salaries, flexible work hours, and better benefits to attract the best talent or retain the talent they already have. Health protections like short-term and long-term disability insurance are especially important as critical differentiators for employers.
Forward-thinking businesses must explore their options if they want to stay competitive and maintain satisfied teams of contract, freelance, and part-time employees. Offering gig, contract, and temporary workers access to disability benefits shows that the company cares about its workforce’s health. The good news is that even without employer-sponsored insurance plans, employers can make sure their employees are financially secure.
The Social Security Disability Insurance (SSDI) program is a federal benefit that can provide a safety net for employers in this situation. This program offers important coverage to millions of Americans, but many workers don’t even know about it. SSDI is available to everyone as long as they meet a set of requirements in their work history and covered mental and physical conditions. Typically, for workers to qualify for this benefit, they must have paid FICA payroll or self-employment taxes for five out of the last 10 years.
One of the great aspects of SSDI is that it’s a “portable benefit,” available no matter where a person works or how many positions they hold. Programs like SSDI Extended Benefits, which is free for employers, provide a portal for businesses to connect workers to this valuable resource if and when they experience a severe disability.
Even if they cannot offer traditional benefits, businesses that can provide gig workers with an avenue for accessing disability protection will be a step ahead of the rest. Utilizing SSDI is a convenient, creative way to make sure your workforce doesn’t move onto the next gig.
John McGrath is director of business services at Allsup, LLC.