Are you a “real” employee, or not?

Gig work and freelance jobs are more popular than ever.

These days, 36% of American workers are in the “gig economy,” doing freelance or temporary jobs. That’s 59 million people.

The problem is…

A lot of gig workers aren’t even aware of their rights.

Gig workers are supposed to be independent contractors.

Companies save money by classifying people like this. It lets them pay people on an “as-needed” basis without providing protections like minimum wage, overtime pay, or health benefits.

In today’s fast-moving employment and labor law landscape, knowing whether you’re really a “gig worker” or an employee is essential. Are you driving for a rideshare company? Delivering food? Working full-time as a freelancer? There are laws that protect your rights, but only if you know them.

The future of work is now. By 2027, nearly 87 million people are expected to be freelancing in the United States. That’s 46% of the American workforce.

Here’s exactly what you need to know…

The Difference Between Employees and Independent Contractors

This is one of the big places where gig workers get mixed up…

Being a contractor matters more than you realize. As a true independent contractor, you have next to no labor protections. As an employee, you have a lot.

How do you know which one you are?

The “ABC test” is what most states now use to determine this. You’ve probably heard of California’s AB 5 law, but California is far from the only state with these rules.

In order to be an independent contractor, these three rules all have to be true:

• You work without the company controlling how and when you do the job.
• The work you do is outside the company’s regular business.
• You have your own independent business in the kind of work you’re doing.

If just one of those is not true of your situation? You may very well be an employee, despite what your contract says.

What most people don’t realize, however…

It’s not the company’s job to decide if you’re an employee or a contractor. The law decides. A company can call you an independent contractor 100% of the time, but if the actual work relationship makes you economically dependent on the company for your livelihood, the law may still consider you an employee.

Your Rights as a Gig Worker (Yes, You Have Some)

Gig workers have no rights at all?

That’s not exactly true. While gig workers are often classified in ways that mean they don’t have all the same rights as “regular” employees, you still aren’t as totally unprotected as you might think. There are several protections gig workers receive regardless of classification.

Anti-discrimination laws. As stated, states like Delaware, Illinois, Maryland, and New York have extended their civil rights protections to independent contractors. This means you have some protections against discrimination in the workplace for your work as a gig worker. So if you’re being denied work for a reason that’s based on race, gender, age, or other characteristics covered by that state’s laws, that may be discrimination.

Minimum pay guarantees. These are starting to show up in major cities as well. For example, New York City now guarantees app-based delivery drivers must make at least $17.96 per hour. This will rise to $19.96 per hour starting April 2025.

Tax deductions. Self-employed people get to deduct expenses from their taxes. Gig workers can write off car maintenance, gas, insurance, home office expenses, and more. These help offset the 15.3% in self-employment taxes you must pay.

That said, there’s a big caveat to these rights…

Gig workers still mostly do not have access to benefits provided by employers. Only 40% of gig workers have medical insurance through their work. 25% have dental. A meager 5% have short-term disability. This is an issue when 4.7 million gig workers make over $100,000 a year in income. It’s not just a side hustle for most of these people. It’s a career.

Recent Law Changes Affecting Gig Workers

The gig work rules are constantly shifting.

Shifts in law directly impact your rights, as seen by two significant federal rules announced in 2024 and 2025.

In January 2024, a new rule was introduced by the Biden Administration. The rule made it more difficult for companies to classify workers as independent contractors by using a six-factor test to determine the “totality of the economic relationship” rather than just who had control over what.

Fast forward to May 2025. The Department of Labor announced it would no longer enforce the 2024 independent contractor rule.

What does this mean for you?

This means we are now in a legal gray area where companies can generally revert back to the “longstanding principles” of classifying workers. There is still a federal regulation on the books, but it’s not being actively enforced. However, individual states like California have their own rules in place. Seattle, New York City, and others have written local ordinances around minimum payments.

There is now a patchwork of rules and regulations across the country, so your rights are based heavily on where you live and work.

When Companies Go Too Far

Misclassification is not just unethical. It is illegal.

Businesses misclassify workers because it is cheaper. Misclassification means avoiding having to pay the:

• Employer’s portion of Social Security and Medicare taxes.
• Unemployment insurance.
• Workers’ compensation.
• Health benefits.
• Overtime.

Total savings of around 30% per worker.

Questions to determine if you may be misclassified:

• Does the company control your work schedule?
• Do they set your rates or fees for services?
• Do they provide the tools and equipment you need to do the work?
• Is the work you do central to their business?

If you answer “yes” to a majority of these, you may very well be an employee being called a contractor.

Did you know something else? Most workers don’t…

You have options to file a complaint. The National Labor Relations Board, the Equal Employment Opportunity Commission, and many state labor departments have authority over worker misclassification. California allows workers who successfully challenge misclassification to get back the wages that were denied to them.

Fighting Back Against Misclassification

You have power as a worker too.

It is possible to organize gig workers. There are still legal hurdles to full-scale unionization, but some workers have been able to achieve it. Uber drivers in some states now have the right to collectively bargain. Delivery workers have been able to organize in some cases to improve their terms of work.

Social media has been the biggest game-changer. When you can’t physically meet with your co-workers in a shared workplace to have conversations, you can meet with them online.

Portable benefits programs are also in the works.

Benefits you can “take with you” from gig to gig are on the horizon. Portable benefits are programs that you do not lose when you switch platforms or clients like you do now. A few states are piloting programs that would provide insurance protections to gig workers that are otherwise typically only available to full-time employees.

The playing field is starting to level itself out. Legal challenges will continue. States will continue to put more protections in place. Workers are organizing.

The first step? Know your rights. Document your working relationship. Save all contracts, communications, and pay records. If you think something is wrong, it most likely is.

Wrapping It Up

The gig economy and the future of work are now.

The gig economy market size is expected to reach $1,847 billion by 2032.

That’s the future of work for millions of people.

But it needs more protections. Understanding the employment and labor law landscape when it comes to gig work is a necessity for your survival in that space.

Know how you are classified. Understand your rights. Do not let companies take advantage of gray areas in the law and misclassification. Fight back when you are misclassified.

The line between employee and contractor may be blurry. But your rights are not.