Gig Economy: Employers Must Pay Holiday & Sick Pay


08 Feb 2018


The Government has confirmed that businesses operating in the so called ‘gig economy’ will be required to pay their workers sick and holiday pay.

The changes are in response to the Taylor Review into Modern Working Practices, which was ordered following a number of landmark court cases involving workers rights with companies like Uber and Deliveroo. Under the proposals the Government has announced it will accept Matthew Taylor’s recommendations to ensure workers are aware of their rights, and that action can be taken against employers who fail to provide the correct rights. Full details will be made public in the forthcoming ‘Good Work’ plan by the Department of Business, Energy and Industrial Strategy. In the meantime, here is what we know so far.

How Will My Business Be Affected?

  • Sick pay and holiday pay will become a day one entitlement: This means all workers will become eligible to SSP regardless of their income from day one. The Taylor Review suggests SSP should be accrued on length of service, similar to holiday
  • All workers will get a new right to receive a payslip
  • All workers will get a new right to request a stable contract: Please note this is only to request, and not to receive.
  • A new ‘naming and shaming’ scheme will be introduced: This is for employers who fail to pay tribunal awards.
  • Employment tribunal fines will be quadrupled to £20,000: This is where employers show malice, spite or gross oversight. Penalties will also be considered where employers have lost a similar case.
  • The Low Pay Commission: will be asked whether a higher minimum wage rate can be introduced for zero-hours workers.
  • A new campaign will be launched: to encourage parents to use Shared Parental Leave, as well as increasing awareness of workplace rights for new and expectant mothers

What May Change?

Consultations will be setup on:
  • Employment status: This will look at all options to make this clearer, including introducing new legislation.
  • Enforcement of employment rights: Such as holiday pay and sick pay.
  • Agency worker recommendations: Such as removing the Swedish Derogation Model.
  • Measures to increase transparency: This is within the UK labour market.

What is Still Uncertain?

The main area of uncertainty for businesses is what options the Government will introduce following the consultations. Before anything is introduced Government has indicated that it will examine the full impact on businesses, which will be many months away. An online tool will also be introduced to help self-employed workers to “come together and discuss issues”, which is not the online tool to help determine status as has been previously talked about.

Expert Support

With more and more firms adopting working practices affected by the Taylor Review it’s essential for employers to ascertain the employment status of your workforce and ensure that they are receiving the correct entitlements. Download our free employment status factsheet here for guidance, or don’t hesitate to call an employment law advisor on 0808 145 3490.

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