What The Rise in The Gig Economy Means for Divorce

In the United States, the gig economy is on the rise with at least 16% of Americans using Upwork, Fiverr, or similar platforms to take up a gig. The industry has been growing by almost 33% a year with the biggest source of gigs coming from global companies like Uber, Lyft, and Airbnb.

The gig economy is not without challenges for those who participate in it. For instance, divorce can get more complicated if you are part of the gig workforce or plan to get married to someone that receives their primary income from full-time, part-time, or remote gigs.

You should consult with an experienced divorce attorney in Alabama to learn about the steps you can take to protect your interests in the event of a divorce when you and/or your partner are a part of the gig economy.

Impact on Alimony for Gig Workers

In general, one of the spouses is entitled to alimony or spousal support after the divorce. This is an arrangement in which one spouse pays a certain amount to the less wealthy spouse if certain factors are met. It is relatively easy to determine the ability to pay through W-2 forms.

Pertaining to this, people employed in the gig sector don’t get W-2s or regular monthly paychecks. When one or both workers are employed in the gig economy, things can get difficult since income can drastically fluctuate on a yearly and seasonal basis.

In addition, the alimony is usually calculated at the time of the divorce and remains more or less the same for the entirety of the duration it is awarded for. This can present clear challenges for someone in the gig sector. For instance, there may be a big client today if you freelance as a graphic designer. This doesn’t mean that there will be the same income stream after a few months.

Based on this, the courts will only look at your last few years of income to arrive at an alimony amount. Without replacing the lost client, you may have trouble paying the alimony. While spousal support payments can be modified with a change in circumstances, you would need to pay for additional litigation expenses and attorney’s fees.

Another major consideration is the lack of benefits in the gig sector. W-2 employees are usually entitled to health insurance, dental insurance, life insurance, and retirement accounts among other benefits. Gig workers are required to dip into their pockets without these benefits, which can further calculate alimony calculations.

In addition, people working in the gig economy find it easier to conceal income. This makes it necessary to work with an experienced divorce attorney.

Calculating and Enforcing Child Support Payments for Gig Workers

Your divorce may become more complicated if kids are involved. Child support poses the same issues as alimony payments. It can be difficult to enforce the child support amount after calculating it. For instance, a W-2 employee’s paycheck can be garnished if they fail to make child support payments. Garnishment may not be possible if the parent doesn’t receive an actual paycheck.

Employers of independent contractors cannot be made responsible to withhold paychecks if the parent owes their ex-spouse child support. In addition, it may get easier for parties to hide their income if they are employed as independent contractors or gig workers. Further, enforcement may attract more litigation expenses and attorney’s fees.

Gig Economy Considerations for Prenuptial Agreement

You can sign a prenuptial agreement to avoid these divorce pitfalls and protect your interests. Prenups in Alabama allow couples to make hard divorce decisions in advance. Since this is before the breakdown of the relationship, agreements made through the prenups are usually in the best interests of both parties.

In addition, getting on the same page and agreeing to tough decisions sets a solid foundation for marriage. You and your partner can use the prenuptial agreement to decide about alimony, how to treat the marital property, and other tough decisions. There are certain things that cannot be included in a prenuptial agreement, such as child custody. Alabama court can render the entire prenuptial agreement void if it contains unenforceable clauses.

This makes it important to work with a competent divorce attorney. Your attorney can help you make decisions about alimony and set clear expectations. They can also list terms for simplifying support calculations down the road.

The options are actually endless where prenups are concerned. You can decide that you both need to be married for at least 15 years for alimony to be part of the conversation.

You can also set alimony caps or include sunset provisions to renegotiate the terms down the road. Property division arrangements can be useful in ensuring that the split is fair and amicable. This is especially helpful for gig workers since their income fluctuates a lot. A seasoned divorce attorney will make sure the prenup reflects both you and your soon-to-be spouse’s wishes while being enforceable in court.

Get High-Quality Legal Representation from Leading Family Law Attorneys in Alabama

The accomplished divorce attorneys at the Smith Law Firm are here to protect your legal rights and interests. We will sit down with you to understand your needs and help you evaluate your best legal options when you and/or your ex are a part of the gig workforce. If you are considering a prenuptial agreement as a gig worker, the attorneys at the Smith Law Firm can draft a document designed to help you move towards a successful outcome.

To request your free, no-obligation consultation, call us at 334-377-1674 or complete this online form.