Self-employed & minimum wage?
According to the Resolution Foundation, some self-employed workers should be entitled to the minimum wage. The thinking is predominantly aimed towards the self-employed workers who are generally on short term contracts or freelance work, also known as the gig economy.
According to the Resolution Foundation, about half of self-employed workers are classed as low paid (earning less than £310 per week) which totals around 2.4 million people. As they are unable to set their own wages, Resolution Foundation believes that these workers should be classed as workers and as such get the same wage protection as employed workers.
Conor D’Arcy of the Resolution Foundation, said: “While many [of the self-employed] are higher earners who benefit from significant flexibility, around half fall below the low pay earnings threshold of just £310 a week.”
“The government can start by extending minimum wage protections to those self-employed people whose prices are set by a firm”.
“This would mean that self-employed people in the gig economy would be given protection against extreme low pay for the first time ever.”
Lord Adair Turner told the BBC that certain ’gig economy’ companies have been operating successfully by avoiding paying the minimum wage or employee contributions.
He said: “I think the scale of it is probably sufficient that we should tighten up on that. Essentially we should enforce the minimum wage on those categories of the self-employed who, when you look at them are essentially employed in the fundamental nature of how their work is organised.”
The Resolution Foundation accepts that the minimum wage cannot simply be extended to cover all types of self-employment and has suggested there should be a test to see whether a person working at an ‘average’ pace would be able to earn the minimum wage by doing their job. The principle of the test could be applied to self-employed people where the price of their labour is fixed by a firm.
Watch this space for future developments.
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