“Gig economy” companies should disclose the average hourly pay received by people working via their platforms, a new report says today.
The report from the Social Market Foundation (SMF) think tank says the Government should make all companies estimate and publish the average hourly equivalent payment to their staff.
This greater transparency would put social pressure on those companies to ensure workers are paid fairly. The new legal duty would apply in the first instance to organisations engaging more than 50 workers.
The new report, entitled Rules of engagement: Reviewing self-employment and employment in the UK, is part of a broader programme of work which the SMF is undertaking, looking into the position of self-employed workers in the labour market.
This research is kindly supported by PRISM, a-not-for-profit professional trade association within the professional payment intermediaries sector. The Social Market Foundation retains full editorial control over all of its outputs.
The report also recommends:
- The Government should design a ‘Self-employed Benefits Package’, which should provide Statutory Maternity Pay, contributory JSA and sick leave insurance to workers that save into a private pension scheme.
- The Government should introduce a ‘Hirer’s NICs’, which would start at 2% per annum and increase each year until parity is achieved with Employer NICs by 2025. This would overcome the anomaly where organisations engaging self-employed workers are exempt from 13.8% rate of Employer NICs.
- HMRC should make a virtue of visibility: pursuing more cases of non-compliance, and publicising how many firms and individuals have been pursued successfully and the value of the money recovered.
- In order for fair oversight the Low Pay Commission should be asked to oversee and scrutinise this process. Ahead of implementation, the Government should consult with contracting organisations, workers, trade unions and others on how best to devise the rules.
Nigel Keohane, SMF research director, said:
“Our proposed new rules make life fairer for the individual and the taxpayer, whilst providing greater certainty and simplicity to businesses.
“This report envisages a future where no matter how the work is performed there is greater evenness in tax treatment and in associated rights. As far as possible, we should be moving towards one form of employment.”
Crawford Temple, Chief Executive of PRISM, said:
“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’ right are upheld.”
Rachel Reeves MP said:
“Policy makers and politicians have ignored for too long the need to focus on fair pay and proper rights for the self-employed. The constructive ideas in this paper are a valuable contribution to the important debate around self-employment.
“We must do more to tackle bogus self-employment, and it’s vital that we prevent the rapidly growing number of self-employed workers from being exploited and help them get workplace benefits.”
NOTES TO EDITORS
- About the Social Market Foundation
The Social Market Foundation (SMF) is an independent, non-partisan think tank. We believe that fair markets, complemented by open public services, increase prosperity and help people to live well. We conduct research and run events looking at a wide range of economic and social policy areas, focusing on economic prosperity, public services and consumer markets. The SMF is resolutely independent, and the range of backgrounds and opinions among our staff, trustees and advisory board reflects this.
- About PRISM
PRISM is a not for profit professional trade association that represents and promotes its members’ interests who all operate within the professional payment intermediaries sector. The sector covers providers who offer support to temporary workers and recruitment companies by providing payroll services, employing workers through an umbrella company structure, and accountancy services support to workers who operate through their own limited company, often referred to as a PSC.
Crawford Temple, PRISM’s CEO, on email@example.com
James O’Keefe on firstname.lastname@example.org // 07775 603299
Maria Bellissimo on email@example.com // 07833 469204