The great ‘gig economy’ crackdown: one bill at a time

Employee Benefits reported last week that a draft bill has been published by the Work and Pensions Committee and the Business, Energy and Industrial Strategy Committee, setting out a legislative proposal which ‘would assume ‘worker by default’ status for individuals working in the gig economy and entitle them to employment rights such as the national minimum wage, sick pay and holiday pay’.

The bill aims to ‘close existing loopholes and clamp down on organisations that currently do not pay the national minimum wage and holiday pay by classing workers as independent contractors’ highlights the article. It goes on to suggest workers ‘should not face a choice between not working or working for below minimum wage’.

The Work and Pensions Committee and the Business, Energy and Industrial Strategy Committee’s proposal recommends that:

  • The government should rule out introducing any legislation that would undermine the national minimum wage or national living wage.
  • The loophole that enables agency workers to be paid less than permanent employees doing the same job must be closed.
  • Organisations should either guarantee hours that reflect the periods worked each week, or compensate workers for uncertainty.

These three key principles follow after recent rulings involving Uber and Deliveroo, whose drivers and riders feel they should be ‘treated equally in terms of employment status and entitlement to employment rights such the receipt of holiday pay and the national minimum wage’.

The Chair of the Business, Energy and Industrial Strategy Committee, Rachel Reeves MP, added: “Uber, Deliveroo and others like to bang the drum for the benefits of flexibility for their workforce but currently all the burden of this flexibility is picked up by taxpayers and workers. This must change. We say that [organisations] should pay higher wages when they are asking people to work extra hours or on zero-hours contracts”.

Whilst further clarity on worker status is essential to ensure a level play field for all businesses and the protection of workers universally, implementing the draft bill will unfortunately be without side effects. A rise in costs and in the complexity of current administrative processes alone, are likely to impact the trend of self-employed workers.

It is also important to note that reclassifying someone as a worker also means they are entitled to auto-enrolment into a workplace pension if they meet criteria – with contributions increasing in April 2018 and 2019, that is a huge additional cost too.

In summary, I agree with the employment team partner at law firm Royds Withy King, Helen Murphie, who commented: “It’s important for businesses that routinely rely on self-employed individuals to review the basis of their engagement, particularly in light of recent court cases which have found in favour of worker status. It’s inevitable that change is on its way.”


Based on original article published at