Call to give 'gig economy' workers the minimum wage

A support body for freelancers has welcomed a recommendation for some self-employed people to be given the National Minimum Wage (NMW).

The Association of Independent Professionals and the Self-Employed (IPSE) said any move to help the low paid self-employed should be "applauded."

Tabled by the Resolution Foundation, the recommendation is not only targeted at those on low pay (said to be up to half of the self-employed population), it would also be just for ‘gig economy’ workers.

In particular, the NMW should be extended to “individuals providing labour to platforms or firms with the firm having power over price-setting”, the foundation says in its new report on the issue.

The platform or firm would be the provider of the wage, meaning the end-user -- which RF says has control over the person’s earnings -- would offer “meaningful” protection from exploitation.

“Someone who does a decent day's work should get paid a fair rate,” agreed IPSE’s Simon McVicker.

“The current grey area around employment status means some unscrupulous employers can get away with shirking the responsibilities… [but] should be paying the minimum wage”.

However, in its report, the foundation concedes that ascertaining which of the self-employed worker’s clients (where they have more than one) should fund the NMW would be a “difficulty”.

The foundation might encounter difficulty of its own if it wants support for its other self-employment recommendations from all single-person businesses.

It wants to scale back Entrepreneurs’ Relief to make incorporation less attractive, even though fresh restrictions to the tax break when selling all or part of a company have this year cut the value of ER by £1.5bn.

Likely to be more palatable to business soloists is its proposal to extend Job-Seeker’s Allowance to some Class 4 NIC payers, and ensure such independent traders receive statutory maternity and paternity pay -- a recommendation already made by MPs.

 

5th July 2017

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