The legal status of gig economy workers must be clarified so that businesses and individuals can thrive, according to a new report from the Recruitment & Employment Confederation (REC).

The report, ‘Gig economy - The Uberisation of work’, produced in partnership with Indeed, explores the impact of digital work platforms such as Upwork, Task Rabbit and Freelancer.com, which act as marketplaces matching freelancers with a wide range of project-based work.

According to the REC, a third of all UK employers are predicted to use digital work platforms by 2021. The REC has called on policy-makers to ensure that the gig economy is fair to self-employed workers and businesses, and to secure benefits for the UK economy.

John Nurthen, Executive Director Global Research commented, “I suspect that employers’ perception of how much online freelance work is undertaken by their businesses (6% according to the YouGov survey quoted in the REC’s report) is underestimated. This is because it is largely uncontrolled and unmonitored spend largely commissioned at line manager level. This probably means that the predictions of a third of all companies using digital work platforms by 2021 is similarly underestimated.”

Key recommendations to government include: 

• Ensure that gig workers and businesses have recourse for instances of bad practice.
• Clarify the legal and tax status of gig workers and ensure they get the same protections as other self-employed workers.
• Look to services such as the Low Pay Commission to determine fair pay for gig workers.
• Ensure the same rules governing the recruitment industry apply to digital work platforms, so that businesses can compete on a level playing field.

“The gig economy is predicted to add £45 billion to the UK economy and create work for 766,000 people. Gig working is heading for the mainstream,” REC chief executive Kevin Green said.

“This is good news for employers who will welcome tools which help them access the global talent market,” Green said. “The UK is close to full employment and businesses across the economy need to react to skills shortages. Current uncertainty around how the UK’s relationship with the EU will affect the jobs market is another driver for innovation.”

“Harnessing new technology which facilities gig working can provide real solutions to embedded labour market problems, but policymakers need to get to grips with these new trends so that the UK can make the most of opportunities. We must ensure that freelancers, interims and contractors who find work this way are protected. For the recruitment industry we want a level playing field on which to compete.”

“The gig economy is disrupting traditional notions of employment,” Bill Richards, UK Managing Director, Indeed, says: Just 13 per cent of British people think they will be working in traditional 9 to 5 jobs by 2025. Online job search and the rise of digital work platforms is creating a wealth of opportunities for the temporary market, with flexible working patterns a driving force behind the gig economy.

“At Indeed, our mission is to help people get jobs,” Richards said. “The insights raised in this report will encourage continued engagement between employers, recruiters, candidates and policymakers to protect and augment the future of work in the UK.”