In recent years, gig economy growth has accelerated. It’s estimated that 20% to 30% of the working age population is now involved in freelance work. While many of these jobs are part-time, more people than ever are relying on it for all of their income. In the UK, the gig economy accounts for 4.7 million workers and if you’re thinking about joining their ranks in 2020, here are some facts you should know.
Many of the organisations responsible for putting workers in gig economy jobs are big, well-known companies, such as Uber, Upwork and Deliveroo, but critics have said that these companies have structured their businesses so as to avoid giving workers employment rights or paying taxes on their behalf. These organisations then make their money by taking a cut (sometimes 20% or more) of what their ‘freelancers’ earn. As these workers are classed as ‘self-employed’, employment laws such as minimum wage or statutory paid holiday don’t apply. The result is many are paid less than minimum wage and have no employment entitlements.
Legal battles continue to be waged over whether or not people that work for some of these firms are indeed ‘self-employed’. Uber, for example, has been told by a labour court in London to pay its drivers minimum wage and give them paid leave. In another landmark case, courier company, Hermes, agreed to offer its drivers minimum wage and holiday pay after a case brought by the GMB union.
Look elsewhere for job security
Finding work, especially gig economy job site platforms such as Upwork or PeoplePerHour, can be time-consuming, low paid and highly competitive. These companies do have regular workers on their books, typically support staff, but these tend to be a small minority of the overall workforce.
Nevertheless, trends show that people are moving to the gig economy, either to supplement their regular work or because the flexibility and hours suit. Many are disappointed by the reality and start a job search for PAYE work soon after. While companies, such as Deliveroo, promise a reasonable hourly rate on their website, newcomers to the gig economy discover that they are either waiting a long time for work or competing with too many other workers to earn anywhere near minimum wage. It all comes down to the fact, that risk is taken on by the worker, instead of the company that operates the business.
There are easier ways to make a living
So if you’re already in a PAYE job and considering a career change, it’s recommended that you don’t hand in your notice straight away. Instead start out part-time. You may discover that you won’t have as much control over your hours as you think. And while there are plans to introduce new tax reforms, you’ll also have the added complication of either hiring an accountant or doing your own taxes.
Which leads to the question of what’s next for the gig economy? Throughout the globe, more and more state bodies are looking to regulate the gig economy. Here in the UK, Theresa May ordered a review of the gig economy during her tenure as prime minister along with a call that workers should have greater rights and protection. Brexit has meant that progress has been slow, but as more people are employed in the gig economy, new legislation is inevitable.
In the meantime, whether you’re looking to get in (or out) of the gig economy, start your job search at Zoek UK.
Interested in finding out more about the subjects raised on this page?
Simply click on the tags below to read related blog posts...