The gig economy often revolves around single assignments being completed for a variety of employers, but in many cases it ends up being a worker completing a multitude of tasks for just one company.
Similarly to the headlines of zero contracts and the exploitations by Sports Direct and its exclusivity clauses, organisations have been taking advantage of this new group of workers. Why though? After all, the concept behind the different ways of working is creating the flexibility and “sharing” workforce. In itself this is an amazing tool, organisations can have people when they need them, with the right skill set and experience.
It saves companies from having employees sitting on the books, not being utilised, in addition, this can save business owners cost on the bottom line.
Typically, workers in the gig economy are engaged as self-employed, freelance or contractors. Consequently, individuals have no employment rights; they don’t pay national insurance or income tax, but do pay corporation tax. However, individuals are stretching the rules of “self employed” and are in fact being used as full time employees, saving money on salaries, benefits, tax and rights.
Another worry for gig economy workers is that there are now too many people retiring without the pensions to support themselves. With the younger generation now thriving off of this economy, it is evident it will only get worse.
The kick back of this has seen cases being brought by drivers at Uber and riders at Deliveroo, helping to trigger a UK government review by Matthew Taylor released on 11 July.
Taylor is recommending a new class of worker be created called “dependent contractors” and that they be given similar rights to regular employees and that national insurance contributions should be paid.
As stated previously, zero hour contracts and using self-employed individuals or contractors can be hugely advantageous to operations of any organisation. However, companies have to make sure the correct engagement documents are in place. This includes: contracts of services, letters of engagement, and the assignment/project they are engaged for.
Employers are also responsible to make sure that when they are working they are not being “controlled” or “supervised” beyond legal requirements.
In the midst of everything that is going on with Taylor’s review it is important business owners stay flexible and open to change.
The worry for SME owners is that the costs of employing people is already high, so for them to then have to pay people holiday, and all the other benefits that a fully employed person has will be a struggle for the financially.
Taylor’s plan is not to make employers fearful as he addresses business owners and clarifies “we don’t want to build on your costs but we do want you to be a little more transparent”.
There are deregulatory measures within the review that will work in employers’ favour. The costs of employing someone have increased over the years by the minimum wage and the apprenticeship levy for large companies. Taylor states his intentions are not to increase that.
The aim of this review is so that the three quarters of the population in the UK that are an employee and the percentage that are working as self-employed, freelance or contracting have more rights, without taking away the flexibility that they enjoy.
Gideon Schulman COO at Pytronot