Freelancer

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A freelancer or freelance worker, is a term commonly used for a person who is self-employed and is not necessarily committed to a particular employer long-term. Freelance workers are sometimes represented by a company or a temporary agency that resells freelance labor to clients; others work independently or use professional associations or websites to get work.

Self-employment is the state of working for oneself rather than an employer.

Employment agency an organization that helps people find a job

An employment agency is an organization which matches employers to employees. In all developed countries, there is a publicly funded employment agency and multiple private businesses which act as employment agencies.

Contents

While the term independent contractor would be used in a higher register of English to designate the tax and employment classes of this type of worker, the term freelancing is most common in culture and creative industries and this term specifically motions to participation therein. [1]

An independent contractor is a natural person, business, or corporation that provides goods or services to another entity under terms specified in a contract or within a verbal agreement. Unlike an employee, an independent contractor does not work regularly for an employer but works as and when required, during which time they may be subject to law of agency. Independent contractors are usually paid on a freelance basis. Contractors often work through a limited company or franchise, which they themselves own, or may work through an umbrella company.

In linguistics, a register is a variety of a language used for a particular purpose or in a particular social setting. For example, when speaking in a formal setting, an English speaker may be more likely to use features of prescribed grammar than in an informal setting—such as pronouncing words ending in -ing with a velar nasal instead of an alveolar nasal, choosing more formal words, and refraining from using words considered nonstandard, such as ain't.

English language West Germanic language

English is a West Germanic language that was first spoken in early medieval England and eventually became a global lingua franca. Named after the Angles, one of the Germanic tribes that migrated to the area of Great Britain that would later take their name, England, both names ultimately deriving from the Anglia peninsula in the Baltic Sea. It is closely related to Frisian and Low Saxon, and its vocabulary has been significantly influenced by other Germanic languages, particularly Norse, and to a greater extent Latin and French.

Fields, professions, and industries where freelancing is predominant include: music, writing, acting, computer programming, web design, graphic design, translating and illustrating, film and video production and other forms of piece work which some cultural theorists consider as central to the cognitive-cultural economy. [2]

Music form of art using sound

Music is an art form and cultural activity whose medium is sound organized in time. General definitions of music include common elements such as pitch, rhythm, dynamics, and the sonic qualities of timbre and texture. Different styles or types of music may emphasize, de-emphasize or omit some of these elements. Music is performed with a vast range of instruments and vocal techniques ranging from singing to rapping; there are solely instrumental pieces, solely vocal pieces and pieces that combine singing and instruments. The word derives from Greek μουσική . See glossary of musical terminology.

Writing representation of language in a textual medium; tool developed by human society

Writing is a medium of human communication that represents language and emotion with signs and symbols. In most languages, writing is a complement to speech or spoken language. Writing is not a language, but a tool used to make languages be read. Within a language system, writing relies on many of the same structures as speech, such as vocabulary, grammar, and semantics, with the added dependency of a system of signs or symbols. The result of writing is called text, and the recipient of text is called a reader. Motivations for writing include publication, storytelling, correspondence, record keeping and diary. Writing has been instrumental in keeping history, maintaining culture, dissemination of knowledge through the media and the formation of legal systems.

Acting impersonation of a fictional character

Acting is an activity in which a story is told by means of its enactment by an actor or actress who adopts a character—in theatre, television, film, radio, or any other medium that makes use of the mimetic mode.

Freelance practices

Types of work

According to the 2012 Freelance Industry Report compiled primarily about North America freelancing, nearly half of freelancers do writing work, with 18% of freelancers listing writing as a primary skill, 10% editing/copy-editing, and 10% as copy-writing. 20% of freelancers listed their primary skills as design. Next on the list was translating (8%), web development (5.5%), and marketing (4%). [3] [4]

North America Continent entirely within the Northern Hemisphere and almost all within the Western Hemisphere

North America is a continent entirely within the Northern Hemisphere and almost all within the Western Hemisphere; it is also considered by some to be a northern subcontinent of the Americas. It is bordered to the north by the Arctic Ocean, to the east by the Atlantic Ocean, to the west and south by the Pacific Ocean, and to the southeast by South America and the Caribbean Sea.

However the recent report on the freelancing culture has shown tremendous growth in terms of percentage of freelancers and the economy contribution they will be generating. According to a survey recently[ when? ] conducted by PayPal, 47% of freelancers have grown in terms of income drawn through the freelancing work in 12 months.[ citation needed ] The freelance field is said[ by whom? ] to grow to 20$-30$ billion in the next 5–7 years in India [5] and the freelancers in US will comprise 40% (approx.) of the work force at the present growth rate. [6]

India Country in South Asia

India, also known as the Republic of India, is a country in South Asia. It is the seventh largest country by area and with more than 1.3 billion people, it is the second most populous country and the most populous democracy in the world. Bounded by the Indian Ocean on the south, the Arabian Sea on the southwest, and the Bay of Bengal on the southeast, it shares land borders with Pakistan to the west; China, Nepal, and Bhutan to the northeast; and Bangladesh and Myanmar to the east. In the Indian Ocean, India is in the vicinity of Sri Lanka and the Maldives, while its Andaman and Nicobar Islands share a maritime border with Thailand and Indonesia.

United States federal republic in North America

The United States of America (USA), commonly known as the United States or America, is a country composed of 50 states, a federal district, five major self-governing territories, and various possessions. At 3.8 million square miles, the United States is the world's third or fourth largest country by total area and is slightly smaller than the entire continent of Europe's 3.9 million square miles. With a population of over 327 million people, the U.S. is the third most populous country. The capital is Washington, D.C., and the largest city by population is New York. Forty-eight states and the capital's federal district are contiguous in North America between Canada and Mexico. The State of Alaska is in the northwest corner of North America, bordered by Canada to the east and across the Bering Strait from Russia to the west. The State of Hawaii is an archipelago in the mid-Pacific Ocean. The U.S. territories are scattered about the Pacific Ocean and the Caribbean Sea, stretching across nine official time zones. The extremely diverse geography, climate, and wildlife of the United States make it one of the world's 17 megadiverse countries.

Compensation

Depending on the industry, freelance work practices vary and have changed over time. In some industries such as consulting, freelancers may require clients to sign written contracts. While in journalism or writing, freelancers may work for free or do work "on spec" to build their reputations or a relationship with a publication. Some freelancers may provide written estimates of work and request deposits from clients.

Contract agreement having a lawful object entered into voluntarily by multiple parties

A contract is a legally-binding agreement which recognises and governs the rights and duties of the parties to the agreement. A contract is legally enforceable because it meets the requirements and approval of the law. An agreement typically involves the exchange of goods, services, money, or promises of any of those. In the event of breach of contract, the law awards the injured party access to legal remedies such as damages and cancellation.

Payment for freelance work also depends on industry, skills, experience and location. Freelancers may charge by the day, hour, a piece rate, or on a per-project basis. Instead of a flat rate or fee, some freelancers have adopted a value-based pricing method based on the perceived value of the results to the client. By custom, payment arrangements may be upfront, percentage upfront, or upon completion. For more complex projects, a contract may set a payment schedule based on milestones or outcomes. One of the drawbacks of freelancing is that there is no guaranteed payment, and the work can be highly precarious. In order to ensure payment many freelancers use online payment platforms to protect themselves or work with local clients that can be held accountable.

As an independent contractor, when a freelancer creates creative expressions such as written or artistic works, they are automatically granted ownership of the copyright for their work. Registration of copyright is not required for ownership of these rights, however litigation against infringement may require registration, as documented in the class action lawsuit, Reed Elsevier, Inc. v. Muchnick, when freelance writers sued publishers for copyright violations, though this case eventually settled for the benefit of freelance writers whether or not they had registered their copyright with the Copyright Office. [7] Copyright is rescinded only when a freelancer signs a contract specifying that they are "working for hire," or if they are hired into employment; these rights are further specified in U.S. copyright law, Section 101 in the Copyright Act of 1976 (17 USC §101). [8]

Demographics

A 2018 McKinsey study found that up to 162 million people in Europe and the United States engage in some form of independent work. It represents 20-30 percent of the entire working age population. [9]

The total number of freelancers in USA is inexact, as of 2013, the most recent governmental report on independent contractors was published in 2005 by the U.S. Department of Labor Bureau of Labor Statistics. At that time, there were approximately 10.3 million United States workers (7.4% of the workforce) employed as independent contractors of all sorts. [10] In 2011, Jeffrey Eisenach, an economist at George Mason University, estimated that number of freelancers had grown by one million.[ citation needed ] While in 2012, the Aberdeen Group, a private research company, estimated that 26% (approx. 81 million) of the United States population was a part of the contingent workforce, a category of casual labor that includes freelancing. [11]

In 2013, the Freelancers Union estimated that 1 in 3 workers in the United States was self-employed (approximately 42 million), with more than four million (43%) of those self-employed workers as members of the creative class, a stratum of work specifically associated with freelance industries, such as knowledge workers, technologists, professional writers, artists, entertainers, and media workers. [12]

In 2016, the Freelancers Union estimated that 35% of the workforce in the United States was self-employed (approximately 55 million). This workforce earned an estimated $1 trillion from freelancing in 2016—a significant share of the U.S. economy. [13] In 2017, a study by MBO Partners estimated the total number of self-employed Americans aged 21 and above to be 40.9 million. [14]

The total number of freelancers in UK is also inexact; however, figures from the Office of National Statistics show that people working mainly at or from home rose from 9.2% in 2001 to 10.7% in 2011. [15] It has been estimated, however, that there are approximately 1.7 million freelancers in the UK. [16]

Freelancing is a gendered form of work. [3] The 2012 Freelance Industry Report estimates that more than 71% of freelancers are women between the ages of 30 and 50. Surveys of other specific areas of freelancing have similar trends. Demographic research on Amazon Mechanical Turk reveals that the majority of North American Mechanical Turk workers are women. [17] Catherine McKercher's research on journalism as a profession has showcased that while media organizations are still male-dominated, the reverse is true for freelance journalists and editors, whose ranks are mainly women. [18]

Benefits

Freelancers have a variety of reasons for freelancing, the perceived benefits differ by gender, industry, and lifestyle. For instance, the 2012 Freelance Industry Report reported that men and women freelance for different reasons. Female survey respondents indicated that they prefer the scheduling freedom and flexibility that freelancing offers, while male survey respondents indicated they freelance to follow or pursue personal passions. [3] Freelancing also enables people to obtain higher levels of employment in isolated communities. [19]

Freelancing is also taken up by workers who have been laid-off, who cannot find full-time employment, [3] or for those industries such as journalism which are relying increasingly on contingent labor rather than full-time staff. [20] Freelancers also consist of students trying to make ends meet during the semester. In interviews, and on blogs about freelancing, freelancers list choice and flexibility as a benefit.

Drawbacks

Freelancing, like other forms of casual labor, can be precarious work. [2] Websites, books, portals and organizations for freelancers often feature advice on getting and keeping a steady work stream.[ citation needed ] Beside the lack of job security, many freelancers also report the ongoing hassle of dealing with employers who don't pay on time and the possibility of long periods without work. Additionally, freelancers do not receive employment benefits such as a pension, sick leave, paid holidays, bonuses or health insurance, which can be a serious hardship for freelancers residing in countries such as the US without universal health care. [21]

Freelancers often earn less than their employed counterparts. While most freelancers have at least ten years of experience prior to working independently, [3] experienced freelancers do not always earn an income equal to that of full-time employment. Feedback from members suggests that web portals such as Freelancer.com tend to attract low paying clients that, although demanding very high standards, pay ~$10 per hour or less. Low-cost suppliers frequently offer to work at rates as low as $1–$2 per hour. Because most projects require bidding, professionals will not bid because they refuse to work at such rates. This has the effect of reducing the overall quality of the services provided.

According to research conducted in 2005 by the Professional Writers Association of Canada on Canadian journalists and editors, there is a wage gap between staff and freelance journalists. While the typical Canadian full-time freelancer is female, between 35-55, holding a college diploma and often a graduate degree, she typically earns about $29,999 Canadian dollars before taxes. Meanwhile, a staff journalist of similar age and experience level working full-time at outlets such as the Ottawa Citizen or Montreal Gazette newspapers, earned at least $63,500 Canadian dollars that year, the top scale rate negotiated by the union, The Newspaper Guild-Communications Workers of America. [20] Given the gendered stratification of journalism, with more women working as freelancers than men, this disparity in income can be interpreted as a form of gender pay gap. The Professional Writers Association of Canada report showed no significant difference between the earnings of male and female freelancers, though part-time freelancers generally earned less than full-time freelancers. [22]

Working from home is often cited as an attractive feature of freelancing, yet research suggests working from home introduces new sets of constraints for the process of doing work, particularly for married women with families, who continue to bear the brunt of household chores and child care despite increases in their paid work time. [23] [24] For instance, three years of ethnographic research about teleworkers in Australia conducted by Melissa Gregg, a Principal Engineer and Researcher in Residence for the Intel Science and Technology Center for Social Computing at UC Irvine, raises concerns over how both physical isolation and continuous access enabled with networked digital media puts pressure on homeworkers to demonstrate their commitments through continual responses by email and to conceal their family or home life. [25]

Internet and online marketplaces

The Internet has opened up many freelance opportunities, expanded available markets, and has contributed to service sector growth in many economies. [26] Offshore outsourcing, online outsourcing and crowdsourcing are heavily reliant on the Internet to provide economical access to remote workers, and frequently leverage technology to manage workflow to and from the employer. Much computer freelance work is being outsourced to developing countries outside the United States and Europe.

Freelance marketplaces provide a marketplace for freelancers and buyers. Service providers or sellers create a profile where they include a description of the services they offer, examples of their work, and, in some cases, information about their rates. Buyers register and complete a basic profile, and then post projects outlining their requirements. Buyers will then bid for these projects on a fixed price or hourly basis. [27] Many of these websites have user review sections that affect the reputation of freelancers who list there, and which may be manipulated. [28]

Freelance marketplaces have globalized competition for some jobs, allowing workers in high- and low-income countries to compete with one another. [29] According to a 2016 study by the McKinsey Global Institute, 15% of independent workers used online marketplaces to find work. [30]

These marketplaces, including Fiverr and Lyft, have been criticized as exploiting workers. [31] [32]

Many periodicals and newspapers offer the option of ghost signing, when a freelance writer signs with an editor but their name is not listed on the byline of their article(s). This allows the writer to receive benefits while still being classified as a freelancer, and independent of any set organization. In some countries this can lead to taxation issues (e.g., so-called IR35 violations in the UK). Ghost signing has little bearing on whether a writer is a freelancer or employee in the US.

Freelancers often must handle contracts, legal issues, accounting, marketing, and other business functions by themselves. If they do choose to pay for professional services, they can sometimes turn into significant out-of-pocket expenses. Working hours can extend beyond the standard working day and working week.

The European Commission does not define "freelancers" in any legislative text. However, the European Commission defines a self-employed person as someone: "pursuing a gainful activity for their own account, under the conditions laid down by national law". In the exercise of such an activity, the personal element is of special importance and such exercise always involves a large measure of independence in the accomplishment of the professional activities. This definition comes from Directive (2010/41/EU) on the application of the principle of equal treatment between men and women engaged in an activity in a self-employed capacity. [33]

The European Forum of Independent Professionals defines freelancers as: "a highly-skilled subset of self-employed workers, without employers nor employees, offering specialised services of an intellectual and knowledge-based nature". Independent professionals work on a flexible basis in a range of creative, managerial, scientific and technical occupations; they are not a homogeneous group and as such, they cannot be considered or investigated as a whole. They are generally characterised by a large portion of autonomy, a high labour productivity, knowledge intensive performance, social commitment and a large dose of entrepreneurship and specialisation.

In Europe, the perceived disadvantages of being freelance have led the European Union to research the area, producing draft papers [ citation needed ] that would, if enforced, make it illegal for companies or organizations to employ freelancers directly, unless the freelancer was entitled to benefits such as pension contributions and holiday pay. In the UK, where the terms of integration into the EU have and are being hotly debated, this would lead to a significant reshaping of the way freelance work is dealt with and have a major impact on industry; employers would be required either to give freelancers the contractual rights of employees or employ only freelancers already being employed by agencies or other organizations granting them these rights. However, the White Papers that recommend such moves have not yet been adopted in the EU, and the potential impact on UK employment laws is being opposed by key UK organizations lobbying the government to negotiate over the acceptance of EU legislation in such areas.[ citation needed ] The legal definition of a sole trader requires that he/she must have more than one client or customer which promotes the freelancing ethos.

In the U.S. in 2009, federal and state agencies began increasing their oversight of freelancers and other workers whom employers classify as independent contractors. The U.S. Government Accountability Office (GAO) [34] recommended that the Secretary of Labor have its Wage and Hour Division "focus on misclassification of employees as independent contractors during targeted investigations." The increased regulation is meant to ensure workers are treated fairly and that companies are not misclassifying workers as independent contractors to avoid paying appropriate employment taxes and contributions to workers' compensation and unemployment compensation.

At the same time, this increased enforcement is affecting companies whose business models are based on using non-employee workers, as well as independent professionals who have chosen to work as independent contractors. For example, book publishing companies have traditionally outsourced certain tasks like indexing and proofreading to individuals working as independent contractors. Self-employed accountants and attorneys have traditionally hired out their services to accounting and law firms needing assistance. The U.S. Internal Revenue Service [35] offers some guidance on what constitutes self-employment, but states have enacted stricter laws to address how independent contractors should be defined. For example, a Massachusetts law [36] states that companies can hire independent contractors only to perform work that is "outside the usual course of business of the employer," meaning workers working on the company's core business must be classified as employees. According to this statute, [37] a software engineering firm cannot outsource work to a software engineering consultant, without hiring the consultant as an employee. The firm could, however, hire an independent contractor working as an electrician, interior decorator, or painter. This raises questions about the common practice of consulting, because a company would typically hire a management consulting firm or self-employed consultant to address business-specific needs that are not "outside the usual course of business of the employer."

Etymology

Although it is commonly attributed to Sir Walter Scott (1771–1832) in Ivanhoe (1820) to describe a "medieval mercenary warrior" or "free-lance" (indicating that the lance is not sworn to any lord's services, not that the lance is available free of charge), [38] a previous appearance occurs in Thomas N. Brown in The Life and Times of Hugh Miller (1809)., [39] p 185. It changed to a figurative noun around the 1860s and was recognized as a verb in 1903 by authorities in etymology such as the Oxford English Dictionary. Only in modern times has the term morphed from a noun (a freelance) into an adjective (a freelance journalist), a verb (a journalist who freelances) and an adverb (she worked freelance), as well as into the noun "freelancer".

See also

Related Research Articles

Temporary work or temporary employment refers to an employment situation where the working arrangement is limited to a certain period of time based on the needs of the employing organization. Temporary employees are sometimes called "contractual", "seasonal", "interim", "casual staff", "outsourcing", "freelance"; or the word may be shortened to "temps". In some instances, temporary, highly skilled professionals refer to themselves as consultants.

A subcontractor is an individual or in many cases a business that signs a contract to perform part or all of the obligations of another's contract.

A professional employer organization (PEO) is an outsourcing firm which provides services to small and medium sized businesses (SMBs). Typically, the PEO offering may include human resource consulting, safety and risk mitigation services, payroll processing, employer payroll tax filing, workers' compensation insurance, health benefits, employers' practice and liability insurance (EPLI), retirement vehicles, regulatory compliance assistance, workforce management technology, and training and development. The PEO enters into a contractual co-employment agreement with its clientele. Through co-employment, the PEO becomes the employer of record for tax purposes through filing payroll taxes under its own tax identification numbers.

An open shop is a place of employment at which one is not required to join or financially support a union as a condition of hiring or continued employment. Open shop is also known as a merit shop.

Contingent work or casual work is an employment relationship which is considered non-permanent. These jobs are typically part time, have limited job security, and result in payment on a piece work basis. Contingent work is usually not considered to be a career or part of a career. One of the features of contingent work is that it usually offers little or no opportunity for career development. Contingent workers are also often called freelancers, independent professionals, temporary contract workers, "temps", independent contractors, or consultants.

Freelancers Union

Freelancers Union is a non-profit organization in the United States of America. The organization provides advocacy and health insurance to its members through its for-profit Freelancers Insurance Company. The union promotes information through monthly meetings.

Misclassification of employees as independent contractors in the United States can occur with respect to tax treatment or the Fair Labor Standards Act.

In business, free agents are people who work independently for themselves, rather than for a single employer. These include self-employed workers, freelancers, independent contractors and temporary workers, who altogether represent about 44 percent of the U.S. labor force. The term free agent is believed to have been coined by Daniel H. Pink, author of a 1997 cover story in Fast Company titled “Free Agent Nation.” In 2001 Pink published a book with the same name. The combination of several workplace trends – including shortened job cycles, the increase of project work, the acceptance of a new lifestyle and the emergence of the Internet and other technology – points to free agent workers becoming more of an employment norm in the coming years. In a 2011 survey sponsored by Kelly Services, free agency is on the rise across all generations, with mature workers making up two-thirds of the free agent population. The survey also revealed that 73% of free agents voluntarily choose this workstyle because they seek the freedom, flexibility and entrepreneurial benefits associated with an independent workstyle.

A vendor management system (VMS) is an Internet-enabled, often Web-based application that acts as a mechanism for business to manage and procure staffing services – temporary, and, in some cases, permanent placement services – as well as outside contract or contingent labor. Typical features of a VMS application include order distribution, consolidated billing and significant enhancements in reporting capability that outperforms manual systems and processes.

Unreported employment; working under the table, off the books, cash-in-hand, illicit work or moonlighting, is illegal employment that is not reported to the government. The employer or the employee often does so for tax evasion or avoiding or violating other laws. The working contract is made without social security costs, and does typically not provide health insurance, paid parental leave, paid vacation or pension funds. It is a part of what has been called the underground economy, shadow economy, black market or the non-observed economy.

Global workforce refers to the international labor pool of workers, including those employed by multinational companies and connected through a global system of networking and production, immigrant workers, transient migrant workers, telecommuting workers, those in export-oriented employment, contingent work or other precarious employment. As of 2012, the global labor pool consisted of approximately 3 billion workers, around 200 million unemployed.

Elance

Elance was an online staffing platform based in Mountain View, California, United States, now operated by Upwork.

vWorker was an online portal and teleworking employment agency that enabled companies to outsource projects and independent contractors to find work. Together with Elance, Freelancer, Guru, and Upwork, it was one of the largest global freelance marketplaces of its kind.

Wage theft is the denial of wages or employee benefits rightfully owed an employee. It can be conducted by employers in various ways, among them failing to pay overtime; violating minimum-wage laws; the misclassification of employees as independent contractors, illegal deductions in pay; forcing employees to work "off the clock", or simply not paying an employee at all.

A statutory employee is an independent contractor under American common law who is treated as an employee, by statute, for purposes of tax withholdings. For a standard independent contractor, an employer cannot withhold taxes. Statutory employees are also permitted to deduct work-related expenses on IRS Schedule C instead of Schedule A in the United States tax system. As a result, they are allowed a greater tax deduction for business expenses than standard employees, as Schedule C expenses are not subject to the 2% adjusted gross income threshold as seen with Schedule A.

Expert360

Expert360 is an online marketplace co-founded by Bridget Loudon and Emily Yue and headquartered in Sydney, Australia. Expert360 acts as a digital platform for matching independent business consultants with clients for short or long term project work. The company is best known for its innovative approach to the local and international freelance marketplace.

False self-employment is a situation in which somebody registered as self-employed, a freelancer, or a temp is de facto an employee carrying out a professional activity under the authority and subordination of another company. Such false self-employment is often a way to circumvent social welfare and employment legislation, for example by avoiding employer's social security and income tax contributions. While a modern "gig economy" encourages more casual employment practices in the interests of labour flexibility, the extent to which this disguises precarious employment and denial of rights is of growing concern to authorities.

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