What is the typical legal classification for workers in the gig economy instead of traditional employees?
Answer
Independent contractors
In most standard arrangements within the gig economy, workers are legally classified as independent contractors rather than traditional employees. This classification fundamentally alters the relationship between the worker and the hiring entity. As independent contractors, they are treated as operating their own small business, meaning they are responsible for self-management of taxes, providing their own tools, and setting their own rates, differentiating them significantly from typical W-2 employees who are subject to employer control and tax withholding.
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