Freelancers are vendors, not employees — so why aren't we supporting them like it?

For decades, businesses have supported full-time employees with benefits: health insurance, paid leave, retirement contributions. By comparison, freelancers get a handshake and a contract, and too often, a late payment. 

Freelancers (and contractors) operate under a different model, one that requires a different kind of support. While many companies want to offer benefits to their independent contractors (and some do), employment laws mean there’s a limit to this. Otherwise they run the risk of their contractors being indistinguishable from their employees — which is a big no, legally.

As the workforce grows its independent contracting space, companies are grappling with a tricky question: how much support can they offer without crossing into misclassification territory? 

Instead of trying to fit freelancers into traditional employee structures in terms of benefits, the conversation should shift to how best to support them as independent professionals. This looks like equipping them with better resources to operate successfully as independent vendors. 

From how to access affordable benefits aimed at freelancers, and better financial education (around running a small business, or as a sole contractor), to tools tailored to the realities of self-employment — they need personalised options.

Where does employer support for freelancers become risky?

Some companies want to provide stability for freelancers, offering perks like access to co-working spaces, stipends for equipment, or professional development funds. But employment law draws a strict boundary: if a company treats a freelancer too much like an employee, they risk misclassification lawsuits — these have cost businesses millions.

Take Uber and Lyft, which have spent years in legal battles over whether their drivers qualify as employees. This uncertainty leaves businesses cautious about how much support they can offer without crossing legal lines. The challenge, then, is finding ways to empower freelancers without putting companies at risk.

Stability with autonomy: personalized support for freelancers

Freelancing is growing rapidly, fueled by technology that makes independent work easier and more accessible. Platforms like Contra connect workers with clients, while companies like Remote handle compliance and payments on the client side as Contractor of Record (and for freelancers, they’ve got a complimentary Freelancer Hub for invoicing and payment tracking).

But typically, while freelancing offers flexibility, it also comes with financial uncertainty.

Many freelancers lack employer-sponsored health insurance, retirement savings, or income protection. Late payments are a chronic issue too: according to Remote’s latest Contractor Management Report, a significant number of freelancers report not being paid on time, if at all.

Payroll has become one of the largest industries in the world, but what has not existed until relatively recently is platforms focused on contractors.

Often, freelancer payments are managed in outdated ways, like on an Excel sheet. This can lead to situations like this; somebody from the client company goes into the bank portal, they pay individuals, they forget to pay one. Then a back-and-forth ensues by email.

Clearly, better systems are needed — but replicating employee benefits or protections for freelancers, as carbon copies, to be provided by clients doesn’t address the needs of freelancers properly. Instead, freelancers need access to benefits designed for independent workers, along with better financial guides, resources and education around managing this type of career.

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Why this matters for companies too

Some businesses may see freelancer finances as outside their responsibility. But in reality, instability among contractors affects businesses negatively. When freelancers struggle financially, they may ghost clients, delay projects, or jump to a competitor who offers better pay terms.

Financially stable freelancers can commit to projects more effectively, deliver higher-quality work, and build long-term relationships with clients.

By supporting freelancers in ways that respect their independence, companies can build stronger, more reliable working relationships. Offering predictable payment schedules, partnering with financial service providers, and simply educating contractors on best practices can go a long way.

What’s next for freelancing? Automation, specialization, and choice 

In the next five to ten years, automation will streamline payments, tax reporting, and contract management, reducing administrative stress. Plus, specialized financial products — from contractor-focused health plans to AI-driven pricing calculators — will help freelancers build sustainable careers faster.

At the same time, perceptions of freelancing are shifting. Once seen as a temporary stopgap, independent work is now a viable long-term career choice. But for freelancers to thrive, there must be a stronger infrastructure supporting them — one that helps them mitigate risk, plan for the future, and achieve financial stability.

A scaling of automation and a democratization of access to benefits is up next, which have typically only been available to employees. There’s already a growing market of benefits providers specifically targeting contractors, and they’re on the right track with this.

The state of freelance work: 2025

Niche skills, classification issues and payment frustrations loom. But the freelancer economy is still booming. So, where are freelancers most in demand? Plus, what skills are most sought after?

See the report

Financial tools, resources and personalised freelancer benefits

Instead of trying to force-fit traditional employment perks onto independent workers, companies and financial institutions could look at ways to support them with targeted resources. This would look like resources that match the realities of self-employment. Here are some key areas where change is needed:

• Affordable, portable benefits: Freelancers need health insurance, but tying it to an employer doesn’t work. More insurance providers are targeting the freelance economy, offering portable plans that individuals can take with them from client to client — like SafetyWing and Catch.

• Income protection and credit solutions: Late payments leave freelancers vulnerable, creating cash flow risks. Some platforms now offer invoice factoring, where freelancers get paid upfront while a third party collects from the client. Others are developing income-smoothing tools to help independent workers predict and manage their finances, like Evrythink.

• Retirement planning built for independence: Most freelancers don't have a 401(k) match, but they still need a way to save. More financial services could offer automated retirement savings for self-employed workers, with easy options for tax-advantaged accounts.

• Financial education for solopreneurs: Many freelancers don’t fully grasp how to price their services, manage taxes, or set up legal protections. Shifting course to a career journey that’s intertwined with their own financial education (alongside their craft) is key here. Eventually, this could look like being fully insured, covered and relatively protected against financial losses when operating as a contractor being the norm.

Currently, there aren’t obvious routes to connecting with each of these elements for freelancers.

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Why this matters for companies too

Some businesses may see freelancer finances as outside their responsibility. But in reality, instability among contractors affects businesses negatively. When freelancers struggle financially, they may ghost clients, delay projects, or jump to a competitor who offers better pay terms.

Financially stable freelancers can commit to projects more effectively, deliver higher-quality work, and build long-term relationships with clients.

By supporting freelancers in ways that respect their independence, companies can build stronger, more reliable working relationships. Offering predictable payment schedules, partnering with financial service providers, and simply educating contractors on best practices can go a long way.

What’s next for freelancing? Automation, specialization, and choice.

In the next five to ten years, automation will streamline payments, tax reporting, and contract management, reducing administrative stress. Plus, specialized financial products — from contractor-focused health plans to AI-driven pricing calculators — will help freelancers build sustainable careers faster.

At the same time, perceptions of freelancing are shifting. Once seen as a temporary stopgap, independent work is now a viable long-term career choice. But for freelancers to thrive, there must be a stronger infrastructure supporting them — one that helps them mitigate risk, plan for the future, and achieve financial stability.

A scaling of automation and a democratization of access to benefits is up next, which have typically only been available to employees. There’s already a growing market of benefits providers specifically targeting contractors, and they’re on the right track with this.