The gig work problem: Who is an employee, anyway?

The European Commission is proposing rules that seek to bring more clarity and fairness to the murky world of app-based self-employment.

A rider for app-based meal delivery platform Deliveroo takes part in a demonstration near the company headquarters in London April 7, 2021.

The booming gig economy has shaken up the world of work. It’s also raised a fundamental question: Who is an employee, anyway? 

Today anyone can download an app and start their own business. Some of the most visible gig workers are drivers who use their own vehicles to deliver people, food, or other goods. Companies like Uber, using algorithms, act as fixers between those seeking services (a ride to the airport, a meal delivered) and those offering them. 

Gig work has been a boon to millions of people. It offers many advantages including flexible work hours and the ability to pick and choose what work to accept.

But does it? Critics say that in some cases gig work has been nothing more than fake self-employment in which workers’ freedoms are so restricted they amount to being employees – but without the fringe benefits employees enjoy.

Last week the European Commission announced the biggest effort yet to bring light and fair play to the murky world of gig work. Its proposed rules would set clear standards for determining who is an employee (and deserving of the benefits of an employee) and who is a self-employed contractor. 

For example, the commission said, if companies don’t allow their gig workers to work for other companies, have rules regarding employee appearance, and require specifics about exactly how tasks must be carried out, they may have turned their gig workers into employees. 

Under the new rules, gig workers could not be fired via automated computer algorithm without explanation. Any important decisions regarding them would be conveyed through a human contact. Most importantly, employers, not the gig workers, would be asked to prove whether or not their gig workers were employees.

The goal is not to try to kill, or even hamper, the growing gig economy, Nicolas Schmit, the European Union’s jobs and social rights commissioner, said last week. What it comes down to, he said, is “ensuring that these jobs are quality jobs. ... We don’t want this new economy just giving low-quality or precarious jobs.”

Gig work includes more than drivers. Potentially, they're anyone who uses an app to seek out work. For example, many are home cleaners or home health aides. The EU says the proposed rules might affect up to 4.1 million gig workers out of the estimated 28 million in the 27-country EU. That number may reach 43 million in the next few years.

The rules are expected to take years to finalize. Pushback will come from Uber and other companies that are concerned too much regulation will restrict tech innovation in the workplace, depriving customers of convenient, affordable services they have come to depend on.

But any new system that exploits workers is a step backward. Efforts to put in place rules that ensure fair play between employers and their gig workers can benefit everyone.

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