51 million people in the U.S. currently have traditional jobs, with 34% more gig economy workers in 2021 than the year prior. That means the gig economy grew 8.25x faster than the U.S. economy in that time, and has doubled in size in the past six years.
Worker sentiment is positive as well, with Small Business Trends reporting that: 74% of gig workers say they love the greater flexibility of contract work, 70% say they are paid more than traditionally paid peers and 58% have a better quality of life.
So while millions of Americans switch from traditional employment to nontraditional roles, how are they handling the change in their pay, taxes and benefits? How are companies and institutions changing the way they handle payroll and manage contractors?
I spoke with Craig J. Lewis, founder and CEO of Gig Wage, a fintech payroll platform, to talk about how people are changing the way they work and businesses are changing their systems to accommodate 1099 employees.
“The biggest challenge in this growth in the gig economy is companies know these employee’s structures and challenges are different, but they try to solve them with their legacy-based tools. They don’t quite understand why having dedicated technology, a dedicated process, a dedicated system is important,” Lewis said in an interview with FinLedger.
“There has been a rush to educate them on these things, things like specifications, speed, instant, fast, flexibility, on-demand, and the mentality of these types of workers. Also the technology that you need from a compliance perspective, but also as a way to retain the talent. That’s what we’re trying to do, educate the customers in the market as fast as the growth happens.”
Gig Wage is a fintech that provides gig economy services for businesses, companies, contractors and freelancers. While the company handles payroll for businesses that want to handle contracted employees, it also helps the gig workers have insights into their payment information.
“Fundamentally, economic empowerment really starts with getting people their money in a non-predatory way. That’s the first step, visibility into their payment status,” Lewis said about the ways Gig Wage helps contract employees.
“The platform gives details about their history and gives them access to the same approval report. They can log into one query and find out when they worked, who they worked for and how much they earned,” Lewis said.
“The query lets people print out their income reports, for student loans and credit cards because one of the hardest things for people is to prove their income. The foundation already validated the sales process to help them access the payment information to help us deliver that as a way of improving their lives.”
Founded in 2014, Gig Wage has raised over $15 million to date through seven funding rounds. This includes a $2.5 million Series A led by The Foundry Group in January and a $3.3 million debt financing round led by Silicon Valley Bank in July.
Lewis says the company has been using this funding to invest in people and processes, with most of the funding currently going towards interesting sales angles and avenues for expanding Gig Wage’s presence in underserved demographics.
“We’re finding unique channels, we call contractor-dependent industries. So we’re doing really cool things like partnering with the Black Truckers Association, they’re independent contractors, or women trucking. There are a lot of contractors who are looking for on-demand tools, so we’re investing in marketing, sales and finding those unique distribution channels,” Lewis said.
In other recent fintech news, SoftBank led Swile‘s $200 million Series D to help grow their employee benefit platform. NerdWallet also dropped its S-1, rumored to be valued at $5 billion.