“Gig economy” businesses should be obliged to publish the average hourly pay of the people working through their platforms, a new report from the Social Market Foundation (SMF) think tank recommends.
The SMF report states that the Government should make it obligatory for all gig economy companies to publicly estimate and disclose the average hourly equivalent pay that their staff receives.
Such transparency will place benign but compelling social pressure on these companies to make sure that their workers receive fair pay. Initially, such a legal obligation would apply to companies with in excess of 50 workers.
The report (Rules of engagement: Reviewing self-employment and employment in the UK,) forms part of a wider comprehensive review that the SMF is working on to investigate the position of self-employed/freelance workers in the UK’s labour market.
This research is being supported by the not-for-profit Umbrella Company trade association PRISM, although the SMF retains full editorial control over all of its published studies.
Other recommendations in the new report include the following:
- The Government should devise a “Self-Employed Benefits Package” incorporating the provision of maternity pay, contributory Jobseekers Allowance (JSA) and sick leave insurance for freelance workers, who would pay into a private pension scheme.
- A “Hirer’s NICs” scheme should be introduced by the Government, starting at two per cent per annum and rising each year until it eventually equals Employers’ NICs in 2025. This would eradicate the current inconsistency, which exempts organisations engaging self-employed/freelance workers from the Employer NICs rate of 13.8 per cent.
- HMRC should promote visibility as a virtue by tackling more incidents of non-compliance as well as publicising successfully pursued cases and publicly revealing the value of the money thereby recovered.
- To ensure fair oversight, the Low Pay Commission should be asked to preside over and parse the process. Prior to implementation, the Government should engage contracting organisations, trade unions, workers and other stakeholders in a consultation process aimed at best devising the rules.
The SMF’s Research Director, Nigel Keohane, said that the new proposals would pave the way to a future ensuring greater evenness in tax treatment and associated rights, no matter how the work is performed.
PRISM CEO Crawford Temple added: “The SMF report has several innovative suggestions, in particular the introduction of a hirer’s NIC. It will ensure greater balance between the traditional and modern forms of employment as well as between employers and workers.
“This report shines a light on the ever-changing nature of today’s labour market within the gig economy. It provides a roadmap for the Government to bring the tax and legal framework in line with the new employment realities while ensuring workers’ rights are upheld.”