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Hourly Workers Still Unaware of W-2 and 1099 Worker Classification Differences

A new study from staffing technology platform Bluecrew has revealed a substantial number of hourly workers…

  • February 3, 2020

A new study from staffing technology platform Bluecrew has revealed a substantial number of hourly workers still don’t understand the distinction between independent contractors with 1099 status and W-2 employees.

Strikingly, when asked what benefits an independent contractor is eligible for, more than half of the hourly workers (57%) surveyed either didn’t know or were unable to accurately identify the distinctions.

According to the data, despite the confusion over worker classification laws, 84% of hourly workers favored worker protections and benefits (such as workers’ compensation, guaranteed minimum wage, overtime, sick pay, and health insurance) as more important than flexibility or considered flexibility and worker protections equally important.

Overwhelmingly, 72% of hourly workers would rather be a W-2 employee than a 1099 contractor.

The report further revealed that nearly three-quarters of hourly workers (71%) were unaware of upcoming regulations like California’s AB5 that would ensure gig workers are treated as W-2 employees and so receive a comprehensive set of worker protections and access to benefits.

Even though the majority of hourly workers were unable to correctly identify or unsure of what benefits gig workers were eligible for, half (48%) believed there should be a law which requires gig workers to receive protections and benefits.

Highlights among the respondents collectively:

  • Two-thirds of Americans (63%) would rather be an employee with worker protections and benefits than a gig worker.
  • The majority (53%) either didn’t know or were unsure of what benefits and protections gig workers were eligible for.
  • A quarter (27%) were unsure what benefits and protections W-2 employees were eligible for.
  • Highlights among gig workers:
  • Two-thirds of gig workers (67%) knew there was a difference between W-2 and 1099 worker classification, and 60% believed they should receive benefits and protections.
  • 41% believed worker protection and flexibility are equally important.
  • One out of four (23%) stated they aren’t getting access to the benefits and protections they need.

Highlights among salaried employees:

  • Two-thirds (65%) knew the difference between being a W-2 employee and an independent contractor, and the overwhelming majority (75%) would rather be an employee over an independent contractor.
  • Flexibility is less important to salaried employees than worker protections and benefits, but nearly half (46%) ranked both as equally important.
  • Nearly three-quarters (70%) were unaware of state regulations like AB5.

Check out the infographic for a visual guide to the survey findings.

Founded in 2015, Bluecrew is an on-demand staffing technology platform exclusively for flexible W-2 work.

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