DWP suggests need for “worker” status in attempt to close loopholes in employment

A Department for Work and Pensions committee has called on the Government to close employment loopholes in an effort to regulate the “gig economy”.

Its report looks at businesses who attempt to evade the responsibilities of an employer by hiring staff on a contractual basis.

It said these practices are potentially creating an extra burden on the welfare state while also reducing tax contributions.

The report includes evidence from both workers and employers at companies such as Uber, Amazon, and Deliveroo.

Leading the report, Frank Field, chair of the Work and Pensions Committee, said: “This inquiry has convinced me of the need to offer ‘worker’ status to the drivers who work with those companies as the default option.

“This status would be a much fairer reflection of the work they undertake which seems to fall between what most of us would think of as ‘self-employed’ or ‘employed’.

“Self-employment can be genuinely flexible and rewarding for many, but ‘workers’ and ‘employees’ can and do work flexibly. Flexibility is not the preserve of poorly-paid, unstable contractors, nor does the brand of ‘flexibility’ on offer from these gig economy companies seem reciprocal. It is clearly profit and profit only that is the motive for designating workers as self-employed.

“The companies get all the benefits, while workers take on all the risks and the state will be expected to pick up the tab, with little contribution from the companies involved.

“It is up to Government to close the loopholes that are currently being exploited by these companies, as part of a necessary and wide ranging reform to the regulation of corporate behaviour.”

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