Companies like Uber, Deliveroo, and other online delivery companies have been under fire for several years over their use of gig economy workers instead of employees.
After a number of major court cases, a European Commission proposal could force these companies to reclassify some of their workers as employees, rather than self-employed.
The proposal, which is the first in the world of this nature, will need to be agreed upon by EU lawmakers and EU member states before it could be approved. The Commission has estimated that it could be approved by 2025 if it gets the level of agreement required.
What is the gig economy?
The gig economy is the rise of short-term contracts and freelance work. In the EU, it’s estimated that in-work poverty and social inequalities have increased in the last decade, and campaigners say the gig economy is partly to blame for this shift.
The EU has planned to strengthen the rights of gig economy workers for some time, as it would mean more workers would be entitled to basic rights like the minimum wage and sick pay.
According to the EU document, it’s estimated that between 1.7 and 4.1 million workers from 15 different companies could be affected by the new rules. It also says that EU countries could get between 1.6 billion and 4 billion euros in additional tax revenue if employees are reclassified.
What are the proposed rules?
The EU is proposing that five new criteria should be used to determine whether someone should be classed as an employee or as a contractor or freelancer. The EU says if a company does at least two of the following, they should be considered an employer:
- Sets the rate of pay for workers
- Gives minimum standards for conduct and appearance
- Supervises work electronically
- Restricts the worker’s ability to choose hours or tasks
- Prevents them from working for other companies
If approved, these rules will require companies to provide information on how they monitor and evaluate their workers, and how they allocate tasks, and determine rates of pay.
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