As lawmakers across the United States revisit how gig workers should be protected on the job, the debate is increasingly focused on one central question - can workers realistically maintain the flexibility that attracts them to app-based work while also receiving meaningful protections when injuries occur?
As the service-led economy continues to thrive, with more and more people turning to gig work as both layoffs and prices increase, there’s a new urgency to the issue. According to data from BRI, the gig economy market size reached $556.7 billion in 2024 and is expected to grow to $2.15 trillion by 2033. What’s more, full-time independent workers more than doubled from 13.6 million in 2020 to 27.7 million in 2024, with freelancers projected to make up over 50% of the US workforce by 2027.
Speaking to IB, Matt Zender, Senior Vice President, Workers' Compensation Strategy at AmTrust Financial, explained that as this subsection of the economy continues to attract new workers, conversations around new legislation are also beginning to heat up.
“It's an emerging [issue] with formative answers, but it's still clearly not settled yet,” Zender said. “I think the industry, in some segments more quickly than others, is moving from a binary choice - where you either have flexibility or protection - to a model where you deliver both through portable, on-demand coverage. This is a model that folks have been working at for years. It's not an entirely new concept, but there are notable differences that need to be contemplated when you're looking at these types of on-demand coverage options.”
Ultimately, he believes the long-term solution lies in adapting protections to the way people actually work today.
“From my perspective, the future isn't about forcing gig workers into the old employment framework,” Zender told IB. “It's about modernizing protections to fit how people are actually working today, and I think that's going to be where some of the more established answers will come about.”
These stakes are growing as more workers choose gig-based employment, meaning what was once associated primarily with ride-sharing and food delivery is increasingly attracting professionals across a range of industries.
“It's a choice that I think more people have available to them,” Zender added. “You have people that work in industries that would have traditionally only been thought of as ‘employee-employer’ - like software engineers. There’s all sorts of people who’re just appreciating the flexibility that gig work can afford. However, the protections just aren’t the same.”
That gap is at the center of current legislative efforts, including proposed changes in Ohio – which examine how to determine whether a worker should be classified as an independent contractor or an employee - and have reignited debate over how gig workers should be classified and protected. In Ohio, as Zender told IB, gig workers are left with two choices.
“They can either go to the elective policies or they challenge their status as an independent contractor,” he explained. “The challenging of status is administratively burdensome meaning a lot of people push back from that. Because if they succeed in challenging their status, it can lead to a lot of fines and retroactive issues.”
For Zender, one of the biggest misconceptions in this whole debate is that many platform-based benefit programs offer the equivalent of workers’ compensation coverage – which simply isn’t the case.
“The fact of the matter is that platform benefits, the benefits that have been considered, they aren't close enough to workers’ comp,” he told IB. “They have limited injury benefits that aren't the same as workers’ comp, they lack statutory protections built to protect injured workers - and the RTW frameworks aren't the same. [What’s more], long-tail coverage and benefits that workers' comp was designed to protect aren't there either.”
As lawmakers and employers search for solutions, Zender believes transparency is essential.
“What I have some concerns about is whether or not the gig workers are aware of what they're getting versus what they're giving up,” he warned.
One frequently cited example is California’s Proposition 22 framework, supported by companies including Uber and Lyft. While it provides some benefits to drivers, Zender stressed that it should not be confused with traditional workers’ compensation coverage - because it’s just not as all-encompassing.
The broader challenge facing policymakers is that the gig economy is testing assumptions that have shaped workers’ compensation systems for more than a century - with workers compensation being designed on stable employers and very predictable jobs. Today, that’s just not the landscape anymore.
“The nature of employers is changing,” Zender told IB. “The nature of jobs is changing. The gig economy breaks those assumptions. The risk hasn't disappeared. It's just been reclassified. If you look back 100 years to the beginning of workers’ comp, prior to that there was tort law - and that was the employee’s option. If a worker was injured, they could sue their employer - and sometimes they won but usually they lost.”
The workers’ compensation system emerged as a compromise designed to provide predictability for both employers and workers. As Zender told IB, it replaced that archaic model with a more predictable system designed to ensure that workers would be protected.
"That's great, and it's worked for a long time," added Zender. "However, things are changing. If either of those systems aren't functioning as they once were, then something's going to fill that void. That's where the platform benefits and the people who are trying to put forward something to help address injured workers - those solutions come in."
And while the landscape is moving quickly, something that Zender is excited to see, he also advises caution to those driving the forces of change.
“If you just looked at who would be the wind beneath the wings of that change, would it be the labour force? If so, why? Gig workers are a fairly disparate group – there are many examples of people trying to build coalitions of gig workers in the US but it takes a while to gather forces and push forward.”
Employers, meanwhile, face significant financial incentives to preserve the independent contractor model.
“If the employers push for the change, I think you'll see something similar to what happened with Uber and Lyft, where they're going to do something that has financial trade-offs for them which make it worthwhile. However, the continued movement towards the gig economy as a percentage of the workforce is continuing to grow - and it was only accelerated by the COVID pandemic. There’s now a dislocation between your job, your location and what your employer means to you. That traditional view is changing.
“I believe there will be a groundswell here, I’m just not clear on where that will come from. But those needs within the gig economy are there, especially considering the huge growth in this space.”
This article was created in partnership with AmTrust Financial
