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UK – MP calls for self employed gig economy workers to be paid the minimum wage

02 November 2016

UK Senior Conservative MP Ed Vaizey has called for self-employed workers in the “gig economy” to be guaranteed the legal minimum wage, reports the Guardian.

At an event on Tuesday, Vaizey urged the government to produce a “definition of a new kind of worker in the gig economy” as a “halfway house” between an employee and self-employed contractor.

“What is emerging from the current debate is an inchoate feeling that there is something out there called the gig economy that needs some definition,” Vaizey said. “I wonder whether the application of a minimum wage to people who work in the so-called gig economy might be one step forward.

“The minimum wage has effectively taken the place now of tax credits as a statutory intervention to support people on low pay.”

Staffing Industry Analysts defines the gig economy as including any contingent work of a fixed duration such as temporary workers (sourced directly or through a staffing agency) and independent contractors.

The gig economy includes firms such as Uber and Hermes, neither of which guarantee the minimum wage.  Last week a London Tribunal ruled that Uber drivers in the UK should be classified as workers and not self-employed, thus they should be paid the minimum wage and be entitled to the same rights as regular workers. Meanwhile, Hermes is under investigation over the low pay of its self-employed workers and Ministers have ordered an HMRC crackdown on firms that deny worker rights to the self-employed.

In October, Theresa May ordered a review of employment law in the UK which will also look at the rights of self-employed workers. Alan Milburn, Chairman of the government’s social mobility taskforce, commented on the review saying that it should clarify that “what is happening in terms of the creation of a class of self-employed is genuinely a demand from the labour market for greater flexibility and is not driven by financial and tax incentives that are creating an imbalanced playing field”.