Navigating Flexibility in the Rise of Independent Work Arrangements for National Disability Employment Awareness Month
By Marion Davis
October is National Disability Employment Awareness Month (NDEAM), a time dedicated to recognizing the contributions of people with disabilities to the American workforce and economy. It also serves as a moment to educate the public on employment issues impacting disabled workers and promote inclusive practices. This year’s focus at EmployDiversity is on the growing trend of independent work arrangements as an alternative to traditional employment, and the impact this shift has on inclusion and equity, particularly for disabled individuals, women, and minority workers. Additionally, this article will examine recent legislative changes aimed at clarifying the classification of workers as employees versus independent contractors.
The Rise of Independent Workers
In 2023, talent acquisition groups noted a rising trend of independent workers in the United States. A McKinsey report from the year prior found that a significant 36 percent of respondents to their American Opportunity Survey self-identified as independent workers, compared to only 27 percent of the workforce identifying as such in 2016. Independent workers include freelancers and independent contractors, where the latter is defined as having a more clearly outlined role with a contract in place.
This distinction is important as 2024 brought new legislation affecting freelancers in the gig economy. On January 9, 2024, the US Department of Labor (DOL) announced its final ruling, effective March 11, 2024, introducing the “Economic Reality Test” to determine whether a worker is classified as an employee or an independent contractor under the Fair Labor Standards Act (FLSA).
The classification, which affects eligibility for minimum wage and overtime protections, is determined by six factors:
Profit/Loss Opportunity: Independent contractors can influence profits or losses through managerial decisions, while employees cannot.
Investment: Independent contractors invest in their business; employees rely on employer-provided resources.
Permanence: Continuous work without a fixed end suggests employee status, while project-based work indicates independent contractor status.
Control: Independent contractors control their schedule, work, and clients, while employees are supervised.
Integral Work: Employees perform central tasks for the business; independent contractors perform non-central tasks.
Skill and Initiative: Independent contractors use specialized skills to grow their business, while employees do not take business initiative.
The Economic Reality Test is assessed holistically with no single factor being definitive.The new rule update by the US DOL ends with the declaration that the existence of an employer-employee relationship as defined by this test indicates that the employee must be paid at least the federal minimum wage of $7.25 per hour and overtime pay for any time worked over 40 hours per week of not less than one and one-half the regular hourly rate.
The new rule especially targets gig workers, particularly those in precarious situations, such as Uber drivers working 50 hours per week but earning an average hourly rate of only $5. In a June 2022 report by the Economic Policy Institute, 29 percent of gig workers who responded to the survey reported earning less than minimum wage in their state.
Ongoing legislative battles continue, especially in states like California, where rideshare and food delivery app workers seek to receive the state minimum wage by overturning Proposition 22 from 2020, which classified app-based workers as independent contractors. The new DOL ruling reclassified many gig workers as employees and thus entitled to the federal minimum wage. However, with the federal minimum wage still lower than the minimum wage in 30 states and Washington, D.C., questions about the adequacy of protections remain.
Impact on Women and Minority Workers
For women and minority workers, independent work arrangements offer both opportunities and challenges. On one hand, contract work provides flexibility, especially for women with caregiving responsibilities, such as mothers who may struggle with traditional 9-to-5 schedules. Independent contractors can set their own hours and control their work environment.
However, the equity gap becomes apparent when considering access to resources and protections. Many minority workers, particularly those in low-wage or gig economy jobs, lack the financial safety net or legal awareness to navigate the challenges of independent work. While gig work may offer flexibility, it often comes at the cost of stability, benefits, and long-term career development. Without proper legal safeguards, gig workers may face exploitation and financial insecurity.
Interestingly, as far as gender trends, more men than women rely on gig work as their primary source of income while more women than men use gig work as secondary income to supplement their income from their primary job. All participants in gig work reported high levels of anxiety than individuals only involved in traditional employment. Workers whose primary source of income was gig work reported the highest level of anxiety as well as an inability to cover unexpected expenses of $1,000 or more and of less financial resilience in the face of economic changes. One report noted that these many gig work platforms are widening the gender gap in the workforce as the platforms are set up with the “independent, efficient, mobile, digitally engaged man without family responsibilities” in mind. The solution noted here in this report was the need for these platforms to treat workers as employees with employee benefits and livable wages.
In a 2020 article in the Journal of Occupational Rehabilitation, the authors reviewed the benefits and challenges provided to disabled individuals in gig work opportunities. They found that while gig work can offer flexibility and autonomy, enabling disabled workers to tailor their schedules and tasks to their health needs, it also presents significant challenges. Many workers face a lack of legal protections, financial insecurity, and limited access to health benefits, making it difficult for disabled individuals to sustain long-term work arrangements. Overall, the theme of this article is that gig work is what people make of it. Disabled workers need extensive tax, accounting, and business know-how to make gig work work for them instead of falling prey to exploitation. While some disabled workers might have the business and financial literacy needed to succeed in gig work, the well-being of populations should be better protected through legal statutes. While it is beneficial for people to improve on the skills needed for self-employment, these skills should help with advancement rather than be needed primarily to avoid exploitation setbacks. The article additionally emphasized the need for enhanced accessibility standards and legal safeguards to ensure that gig work remains a viable and equitable option for disabled workers.
Impact on Disabled Workers: Flexibility vs. Accessibility
For disabled workers, independent work can offer a double-edged sword. On one side, the flexibility inherent in contract work allows disabled individuals to tailor their work arrangements to accommodate their health needs. For example, remote work, flexible hours, and project-based tasks can help overcome the barriers disabled workers face in traditional employment. However, accessibility challenges remain significant. Disabled workers frequently report that mandatory meetings present major accessibility hurdles. Section 508 of the Rehabilitation Act provides guidelines for making mandatory meetings accessible to disabled employees. As virtual meetings have increased, so have issues like flashing lights in presentations (problematic for individuals with epilepsy) or lack of live captions (which hinders lip-reading for the hearing impaired). Often, companies fail to adhere to accessibility laws, forcing disabled employees to hire legal representation to advocate for accommodations. Here, independent workers can have an advantage in outlining their own work arrangements in a way that is accessible; however, doing so requires knowledge of tax laws such as that independent workers can set their own schedules and meeting attendance preferences. The issue is that disabled workers need business literacy in this area to better self-advocate.
Independent contractors often have greater control over their work environment and schedules, a fact that can be critical for workers with disabilities. They can shape their work conditions to meet personal needs, managing health conditions without needing formal accommodations from employers. Still, this autonomy comes with challenges. Many disabled contractors lack the resources and protections available in traditional employment, such as healthcare benefits and legal safeguards, making them more vulnerable to exploitation and financial instability. These workers must navigate complex tax and business regulations, which can be overwhelming without proper support or training. This places an additional burden on them, requiring a high level of financial literacy and business management skills to avoid setbacks.
The increased reliance on independent work has raised concerns about equity and protection for disabled workers. While the flexibility of independent contracting can offer valuable opportunities, without strong regulatory frameworks and accessibility standards in place, many workers risk falling through the cracks. Companies must adapt their practices to ensure that independent contractors and gig workers, including those with disabilities, can thrive without sacrificing their well-being or financial security.
Challenges of Scope Creep and Legal Gray Areas
Scope creep involving companies beginning to treat independent contractors like employees is a common issue in contract work. For instance, companies sometimes expect contractors to maintain availability during specific hours, violating the classification rules for independent work. Disabled employees may struggle when companies subtly pressure them to participate in inaccessible meetings or tasks, forcing them to choose between asserting their legal rights or securing their income.
Independent contractors, however, are in a unique situation that they can leverage as companies cannot legally require them to work set hours or perform tasks in a certain way. For example, while some autistic employees struggle to gain permission to wear headphones for noise sensitivity—sometimes even being asked to provide a doctor’s note—an autistic independent contractor has more control over their work environment. If a client requests that they remove their headphones, the contractor can politely decline as independent contractors maintain autonomy over how they complete tasks, preserving their classification as self-employed. Thus, independent work offers disabled workers a stronger position to define their work environment and respond to requests that do not meet their accessibility needs.
Advantages of Contract Work and the Necessary Mindset Shift for Independent Contractors
Contract work can be advantageous for both workers and companies. For workers, the independence and flexibility to set their own schedules and the project-based nature of their work allows them to prioritize their health or personal needs. Disabled workers can negotiate better accessibility requirements in their contracts, work from home, and adapt their workload as necessary. Additionally, contract work enables upward mobility as independent contractors can increase their rates as they build experience.
For companies, contract workers offer a cost-effective solution. Independent contractors require less onboarding and training, especially as they are expected to be experts in the area they cover. Companies also save money in the absence of a need to pay benefits and may only retain contractors for the duration of a project, creating greater efficiency.
The mindset shift from employee to independent contractor is crucial, particularly for disabled workers. Independent contractors are expected to be self-sufficient, manage their own work, and set boundaries without relying on accommodations typically provided in employment. Some disabled individuals transitioning to contract work may struggle with this independence, expecting accommodations like lengthy calls with supervisors or full-time work offers to meet financial needs. This mindset can create negative perceptions about their ability to work as contractors, potentially closing doors for future opportunities.
It is essential that disabled workers entering contract work fully understand the legal distinctions and expectations to thrive in this environment. Independent contractors must adopt a proactive approach, demonstrating their expertise, setting clear boundaries, and managing their own success.
Final Thoughts
The rise of independent contract work brings both opportunities and challenges for women, minorities, and disabled workers. While the flexibility and control offered by independent contracting can provide much-needed autonomy, issues of accessibility, legal protections, and equitable opportunities persist. As the workforce continues to evolve, workers, companies, and policymakers must ensure that the benefits of independent work are accessible to all, creating an inclusive environment where marginalized groups can thrive. Workers must be empowered with knowledge about their legal rights while companies must adapt to create equitable opportunities across the workforce.
Marion Davis is a contributing writer at EmployDiversity.com. She is a disabled DEIA consultant and writes on the value of diversity and inclusion across multiple industries, specifically as relates to disability and intersectionality.
