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Think tank calls for minimum wage and better protection for gig economy workers

Firms that claim merely to connect self-employed workers to customers while setting the price for work done could be affected by the proposed changes.
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Greater enforcement of employment laws is needed to protect gig economy workers as, unless rules are changed, firms could rely on self-employed contracts to avoid paying minimum wage.

This is the view of the Resolution Foundation, which recently argued the government should extend minimum wage legislation to protect the UK’s 4.8m self-employed workforce, as well as those gig economy workers.

Firms that claim merely to connect self-employed workers to customers while setting the price for work done could be affected by the proposed changes.

In recent years, firms such as Uber and Deliveroo have spurred interest in the gig economy. It has also made headlines for controversial payment practices and zero hours contracts, which has led to growing concerns regarding the protection of gig economy workers.

However, as the practice continues to grow and is undeniably of use to some businesses looking to recruit and scale up quickly, Lisa Johnson, global practice leader (Consulting Services) at Crown World Mobility, a company which helps corporations manage global talent, claims there should also be a focus on how to attract the right workers, support them, and retain them.

She said: “A recent Intuit study predicts that by 2020 up to 40 per cent of US workers will be independent contractors – and you’d expect that figure to be replicated in other markets too.”

“The issue of ‘perma-temps’, where companies don’t want to fully commit to hiring a full-time employee, adds confusion to the numbers. But the feeling in global mobility is that Generation Y and Z are increasingly enticed by the freedom the gig economy can provide.”

“Certainly, the issue isn’t going away – so global mobility managers need to get to grip with it as soon as possible.”

Due to the ad hoc nature of the gig economy, it is hard to put a figure on how many people are part of it. However, estimates from the Chartered Institute of Personnel and Development (CIPD) and the Royal Society for the encouragement of Arts, Manufacturers and Commerce (RSA) put it at just over a million.

Despite the controversy surrounding the gig economy, some people have leapt to its defence as simply embracing technological change.

This article is part of a wider campaign called the Scale-up Hub, a section of Real Business that provides essential advice and inspiration on taking your business to the next level. It’s produced in association with webexpenses and webonboarding, a fast-growing global organisation that provides cloud-based software services that automate expenses management and streamline the employee onboarding process.

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About Author

Letitia Booty

Letitia Booty is a special projects journalist for Real Business. She has a BA in english literature from the University of East Anglia, and since graduating she has written for a variety of trade titles. Most recently, she was a reporter at SME magazine.

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