Everything you need to know about gig economy workers

An evolution from the typical 9-5 job, gig work has risen to prominence over the last decade. Characterised by freelancing, flexibility and short-term contracted working, gig economy workers have greater control over their work-life balance, schedule and their clients and/or projects. 

This flexibility comes at the expense of stability both in terms of income and working rights, with protections that are often afforded to employees and workers. 

Some gig economy workers interact with businesses as independent contractor, meaning that they fall under the self-employed label, however this is not always the case, so if your business uses contract workers or freelancers, you should ensure that you ascertain their status to ensure that there is no risk of becoming ensnared in legal litigation. 

If you have any questions regarding employment status and hiring contract workers, call the Employment Law advisory team at Croner. With over 80 years’ of providing solutions to businesses on everything from Employment Law, HR and Health and Safety, you’re sure to be in good hands with our award winning services. Call today on 0808 501 6651.

What is the gig economy?

Covering a wide range of working arrangements, gig economy workers include rideshare drivers, takeaway delivery drivers as well as freelance copywriters, digital consultants and many more, in multiple industry sectors.

Workers in the gig economy tend to engage in the short term and the work they undertake is mainly task or project based. They often pick up work through digital platforms or apps (think Uber or Upwork). Roughly 1.7 million workers are employed under the gig economy and this number is only set to increase over the next few years.

How are gig economy workers classified?

Gig workers often cause confusion amongst business owners as the classification of their employment status might not be that which is outlined in their contract due to the nature of their work. This was shown to be the case in the ruling of Uber BV and others V Aslam and others, in which the UK Supreme Court ruled Uber drivers were workers and not self-employed, despite their contract stating self-employment.  

The reasoning behind this was based on numerous factors, mainly the control that Uber had when it came to driver remuneration, and the terms of employment outlined in the contract. Ergo, even though Uber had stated that drivers were self-employed in the contract, the reality of their conditions were that of a worker.

If you operate a business that uses gig workers, then you should seek advice on employment status from the Croner Employment Law team, who will be able to help ensure your contracts are compliant with the latest legislation. 

What should businesses who employ gig economy workers consider? 

If your business utilises gig economy workers in any capacity, then you should consider the following:  

Understand employment status:

Gig workers can be classed as employees, workers or independent contractors. In order to correctly classify as these your employment contracts and documentation as well as your working practices should align with the legal definitions.

You should continually review these practices in order to ensure that they align and update your contracts and documentation accordingly.

Understand worker rights and protections:

Get a clear understanding of worker rights and protections under the Employment Rights Act 1996 as well as familiarising yourself with the upcoming changes of the Employment Rights Bill. This includes:

• The National Minimum Wage
• Paid Annual Leave
• Protection from Unlawful Deductions
• Statutory Sick Pay
• Protection from discrimination
• Rest breaks and limitations working hours

Employers are expected to remain compliant with current Employment Law legislation, failure to do so can result in costly legal expenses and penalties, not to mention reputational damage.

Identify the degree of control your business has over gig workers:

The level of control your business exerts over gig workers can unwittingly alter their employment status, even if it is specified as something different in your contracts and documentation. 

For instance if your company has high levels of control over schedules and performance then an independent contractor, may technically no longer be legally classed as such, and might instead be deemed a worker under employment law. 

Consider as well the economic dependency that gig workers have on your business. If they have a high degree of dependency on your business for their income, it might also move them from contractor to worker (or even employee definition) in the eyes of the law. 

Create a culture of transparency and put this into practice

This can include things like clear communication and clearly outlining the terms and conditions of the working engagement, to all gig workers. This can also mean communicating any rights, responsibilities and benefits.

You should also ensure safe and fair working conditions in compliance with legal standards and best practice. 

Implement best practices 

Make sure to document all engagement processes with gig workers, this can include documentation like contracts, schedules and records.

Ensure correct training for all HR and management on the correct processes on engaging with gig workers and ensure that these are legally compliant and documented. 

Regularly audit processes and seek legal advice

As part of your overall processes, regular audits of employment practices, policies and documentation should be undertaken to ensure legal compliance. Consult with legal professionals that specialise in Employment Law in order to get up to date advice and guidance.

Ensure your business complies with health and safety regulations

Your business is responsible for the health and safety of your workforce, this includes agency workers, contractors and gig economy workers regardless of their employment status.

You should conduct a risk assessment to identify the risks that your workforce faces and help identify control measures. This also extends to insurance to cover anything that they could potentially be accountable for.

Contact Croner for all your Employment Law needs

Our dedicated team of advisors can help your business engage with the gig economy, helping you to create legally compliant policy and advising on worker status, in line with the latest legislation. 

Call Croner today on 0800 470 2807 for all your business HR, Employment Law and Health and Safety needs.

Need answers in a hurry? Try Croner Brainbox and get them in seconds.