Lord Adair Turner, former chairman of the Low Pay Commission, an independent body that advises the government on National Minimum Wage and National Living Wage, has said that minimum wage requirements should be extended to the self-employed.
Calls to provide payment protection for Contractors and Freelancers have come just weeks, or months before the release of Matthew Taylor’s report into employment practices. The exact date has not yet been released, but the report is set to be published over the summer period.
Lord Turner, said, “There is a subset of self-employed people – but not all self-employed – who are doing jobs that are pretty much employee-like.”
He continued, “And that category appears to have grown, at least in part, probably, because we have imposed a minimum wage on employees.”
“It is a regulatory arbitrage, people are moving off to be self-employed or their employers, the people organising their work, are doing it.”
Self-employed workers are not entitled to the National Minimum Wage, which currently stands at £7.50 per hour for people aged 25 and over.
The Uber Effect
In 2016, a landmark employment tribunal against mobile-taxi hailing app, Uber, found that their self-employed drivers should actually be classed as employees.
The technology-driven taxi service which has been rolled out worldwide has revolutionised the transport industry, with the company value standing at more than £50bn. The transport giant employs as many as 40,000 drivers – just in the UK.
The tribunal ruled in favour of the workers and it was concluded that Uber will be required to provide holiday pay, pensions, and other employment rights to their drivers.
The ruling has turned the spotlight towards bogus self-employment cases, where the employer categorises workers as ‘self-employed’ in order to avoid meeting minimum wage requirements.
Matthew Taylor’s report on the gig economy is expected to focus on a new business model that lays out clear rules on how to determine self-employed and worker status.
Taylor, Head of the RSA, will also analyse the tax treatment of self-employed workers and how this affects the growing trend.
The Work and Pensions Parliamentary Committee inquiry report into self-employment was also published earlier this year, finding that companies and global enterprises, such as Uber, have failed to ‘protect workers from exploitation and poor working conditions.”
The full scope of the Matthew Taylor review can be found here.
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