MPs draft bill to close loopholes used by 'sharing economy' employers A draft UK law bill intended to close loopholes in so-called "gig economy" employment practices has been published today by Parliament's Work and Pensions and Business, Energy and Industrial Strategy (BEIS) Committees. The joint report and draft bill is intended to address the use bogus "self-employment" status as a route to …
@AC, does it benefit all workers? Those with highly changeable private demands, students, pin money workers, etc. have been cited as needing and welcoming very flexible arrangements. If this draft idea turns out to be draft and not daft as is the case with so many bills, it could be welcomed. The heavy emphasis on tax payments (and NI?) suggests a different agenda. With the tax threshold rising, many part time workers normally remain below the tax thresholds and maybe the NI ones as well anyway. Otherwise it could turn into a loss of worker's favoured flexibility plus a demand for taxes, which might well show the law of unintended(?) consequences is alive and still flourishing to the unexpected detriment of those it allegedly sought to serve.
On the other hand those casual workers moonlighting from other 'real economy jobs' might be the real target of this fishing trip, in which case perhaps they should be brought within the tax net.
Sure, there are some people whose life don't wholly depend on the money they earn from their work, and just look for a part time job to get the money for some leisure expenditures.
But when the same approach is fully and forcefully applied to people who need a full job to build a life and take care of them and their families, and it used because it takes away any responsibilities from their employers, and put the full burden of their welfare expenses on other workers whose wages are not so high, it becomes, yes, a disruptive force, in the sense it cripples the whole society and turn the clock back to an era of serfs paid peanuts and wealthy people fully exploiting them - with very little hopes to raise from the former to the latter.
We've seen it all before - are we really sure we want to get back there?
We've seen it all before - are we really sure we want to get back there?
People like Boris Johnson, Priti Patel, Ian Duncan Smith and John Redwood are on record as saying they want to use Brexit to scrap the social chapter and reduce employee protections, so I think you might be able to guess which century they want us serfs to be living in.
Priti Patel also exploited the immigration-phobic Brexit bandwagon while at the same time arguing for *more* immigration from the Indian subcontinent on the spurious excuse that Britain had older ties with that part of the world. (#) Which- oddly coincidentally- is her own ethnic background and was used to increase support for Brexit in sections of the Asian community.
The kneejerk Little Englanders who weren't paying attention to this deserve no sympathy. Equally, nor will those who thought they could exploit the Brexit to promote their own ethnic self interest if it backfires (i.e. if the former gets wind of what the latter are trying to do).
While we're here, let's also remember that everyone's "favourite" self-promoting inventor, James Dyson- who shut his factory in the UK around 15 years ago and now manufacturers his products in south-east Asia but is still treated as a national hero- also supported "Leave" and campaigned for the reduction of employment protections and scrapping of corporation tax. In short, just another hard-right Tory.
Remember that the next time you buy a Made-in-Malaysia Dyson vacuum cleaner.
I have no sympathy for those who voted for Brexit without noticing- or caring- that it was blatantly driven by these types of people, the ones who want to ditch social protections and turn Britain into a low-tax, low-rent economy. That's what you voted for, and that's what you're getting. They deserve to be (metaphorically) hit ruthlessly with the consequences of their own ignorant stupidity.
Unfortunately, the rest of us will suffer for this as well.
(#) There are many Tories who still- clearly- think that the relationship between Britain and India et al is still as it was at the end of Empire, that it's still a friendly community of equals, without realising that they were the school bully who is no longer in a position of power, but still with delusions that they're looked upon more fondly than is the case. Particularly now that it's no longer the 1940s and the balance of power has shifted and rests more with those approx 1.5 billion people a lot more than it does with Little England and Its Provinicial Chums. They are in for a shock.
Yes, you see that from those Shakespeare works like the Merchant of Mumbai, Julius Ceasaresh, and the prototype of every Bollywood movie, Romeo Ashok and Juliet Patel. Or when he writes "Something is rotten in the state of Punjab"....
Even Beowulf was known for its Sanskrit poem, and Grendel was of course hidden in the Indian forest.
But I guess the Indian caste system matches very well the British one...
This relates relatively closely to the "lump of labour" fallacy.
The reality is that two things will happen:
1) A non-trivial fraction of the work currently done by people on 0-hour contracts will end up not being done at all because the net productivity isn't worth the cost of complying with extra regulatory requirements.
2) The remainder that does get done will end up being done by larger suppliers of such services with fewer employees for whom they have enough work to keep at full utilisation.
The net result is that larger business will squeeze smaller ones out of the market, and those who end up not getting one of those full time contracts with a larger supplier are going to end up on the dole and increase the burden on the state.
In other words, while it sounds like socialism for the worse off individuals it is actually corporate socialism helping only bigger businesses by reducing competition.
It's the same reason why big business generally supports extra regulatory requirements because they can afford to implement the required compliance, whereas for an upstart the burden of extra regulations means they are unable to grow to become a competitor.
If they want to kill off zero hours contracts, make employers pay available-but-unworked hours payable to the employee at some statutory minimum "availability rate", essentially a mandatory on-call allowance. I'd suggest around a quid an hour would be enough to do it. That still enables companies to have flexibility, but it means that flexibility doesn't come at such a cost to the welfare state, and encourages employers to have contracts that reflect their needs, rather than shifting the risk and burden on to employees.
As for well paid professionals, they are clever enough to sort themselves out - even if this applied to them, a quid an hour is going to be trivial in the grand scheme of their employment costs.
"The whole point of zero hour contracts is for well-paid professionals who work as a limited company, not for minimum wage workers where there are zero benefits."
And yet look what they are doing with IR35. If you think this is for purposes of anything but a tax grab from employers and pushing small suppliers out of the market in favour of big consultancies you are sadly deluded.
No.
Zero hour contracts are EMPLOYMENT contracts.
Contractors working through a limited company are already employees of their own companies the arrangement between them and a client is B2B.
Zero hour contracts are nothing to do with contractors working through a limited company.
"a new presumption of "worker by default" that would require companies to provide basic safety-net standards of rights and benefits to their workers, or prove that their working practices are genuinely reflecting of self-employment."
Ah, so now we know why the "default" outcome of so many test on the HMRC IR35 testing tool is "Employed" - They were planning to use it for all these gig economy "jobs" too... so the presumption is "employed"
Anon 'cos employed by PSC ltd ;-)
"Anon 'cos employed by PSC ltd"
Well you see theres part of the problem. Can you show me a legal definition of PSC?
I too am a contractor running my own limited company, in contrast I fight the label PSC at every opportunity as I am not running a personal services company, I'm just running a company, most of the time it's just me, but that's not always the case. Accepting the label PSC is to accept the negative connotations that HMRC and others have attached to this.
We say that companies should pay higher wages when they are asking people to work extra hours or on zero-hours contracts.
Actually that by itself should do it. Make the minimum pay to be 2x statutory minimum on zero hour contracts as well as any overtime up to a full 37.5 hour week on part time ones. I suspect that they will not have the guts to do that though (*).
Top this up by prohibition of any contractual relationship between a company and self-employed at tax level. Only physical persons can employ a self employed which is not registered as a company or at least sole trader. You want to be "self employed" which works for Uber - fine, company house, LTD and proper accounting please. Nothing personal, just business - I am paying a 5 digit sum in taxes and NI per year and while I am happy for this to go to people who are in need, any ideas that it should pad scumbags like Uber or Delvieroo bottom lines is off the menu.
This will sort the whole Gig Economy/Sports Direct situation overnight.
(*)Time to get on "write to them" and send a Christmas card to my MP on this subject I guess
This would have repercussions in other industries that you are not expecting. Many charities use support workers on zero hour contracts for various valid reasons. Your suggestion would cripple charities with greatly increased labour costs and be detrimental to the care of the disabled and other vulnerable groups.
Your suggestion would cripple charities with greatly increased labour costs and be detrimental to the care of the disabled and other vulnerable groups.
I'm with Voland's, in principle, although not necessarily on the specific figures. There are ways of implementing this that could enable (say) charities to be exempt, and with the Charities Commission given powers to suspend this for specific charities if they find that any are abusing the exemption. Charities have always had different tax arrangements, so this isn't a big deal.
Hmmm. Exempting Charities in general sounds like a good idea, until you start looking at some of the money-making organisations registered as Charities. The big-name UK universities, for example, or even the private school up my street, which IMO should be regarded as a business like any other.
But anyway - the argument about what should be a charity doesn't deduct from your point.
Many charities use support workers on zero hour contracts for various valid reasons. Your suggestion would cripple charities with greatly increased labour costs and be detrimental to the care of the disabled and other vulnerable groups.
1. As Ledswinger said there is no reason not to give charities an exemption.
2. Caring for the groups you have mentioned is a blatant example of zero-hours abuse in the marketplace. If you have 30 disabled you as a charity are taking care on a council ward, the time it took this week is not going to be drastically different from the time it takes next week. The only time it changes are medical emergencies and in that case it actually goes down as NHS takes over.
The only reason the care worker taking care of that is employed on a zero hour contract is exactly that - convenience and ensuring that he/she continues to get the 7.36£ average hourly pay for a care worker at 40 the same way he/she did at 20 (this is according to national statistics for UK). Excuse me for being blunt, but as far as hypocrisy goes that is possibly on par with Mike Ashley - you are in a position to offer a proper job, you have the proper work, the work is pretty much nailed to an exact number of hours per week and you deliberately screw the worker who actually does the work. On top of that you try to climb on an even higher soap box than Uber and you beat yourself in the chest about being charitable and public morals.
Bleurgh... excuse me while I retch, and frankly I am not sure about the exemption on charitable organizations.
re Voland's point 1. As Ledswinger said there is no reason not to give charities an exemption.
Oh yes there is.
The local sports organisation around here is a registered charity and not,as one would expect a council run organisation which its name would imply.. With twenty or so physical facilities, and likely hundreds of staff*, they have a substantial revenue and wages bill. They must have some overriding reason for being a charity.
Why on earth should they be exempt from operating PAYE and paying Employers NHI?
*As well as some who are deemed to be "self employed" but are clearly under full control of the organisation as to what work to do, when to do it, and precisely how to do it. Borderline tax avoidance.
And no doubt, 1000's more are of the same type.
Take a traditional charity, one of the big ones. Oxfam, Help the Aged, et al. I don't know the fine detail but many nowadays pay top salaries upto and exceeding six figures. Why should that be tax and NHI free?
"Most charities are, in effect, businesses. They employ professional fundraisers, own shops, etc."
Working (actually volunteering) in the charity sector I can say that that is complete and utter bullshit.
Let me update it for you.
""A few large charities are, in effect, businesses. They employ professional fundraisers, own shops, etc.".
We run a "shop" (actually a cafe) and every single penny goes into running the cafe, employing a whole two people and a dedicated youth worker for all the other work. The other 30 odd people don't get paid a penny.
Are we distorting the market? Well until we existed, there was not another single cafe in the area, let alone youth facilities. Now there are three cafes, the other two run for profit.
Still if you prefer you money to go to Starbucks, feel free, we won't stop you.
"How are these people employed? It sounds is if they're regular employees."
We used to employ several people on zero hours. It was their choice.
They wanted to pick and choose their hours, one due to childcare, one was a student, so sometimes didn't want to work for a week or two if they had a big assignment on, or just wanted a few days off, one was semi-retired and theother just wanted the flexibilty.
We actually stopped it, not because it was "evil" but it actually caused us far more problems staffing wise. People get themselves that "all zero hours must be banned" mentality, but for some, it is what they want.
The problems arise when it is the ONLY option, not a chosen option.
"Many charities use support workers on zero hour contracts for various valid reasons. "
It's funny how, whenever this statement comes up, no-one can ever specify what the 'valid reasons' ever are. Just like whenever the 'people who appreciate the flexibility of zero-hours contracts' are mentioned, no-one can ever find a real-life person it applies to outside of the local Young Conservatives chapter.
" no-one can ever specify what the 'valid reasons' ever are. Just like whenever the 'people who appreciate the flexibility of zero-hours contracts' are mentioned, "
"McDonald’s is offering UK staff on zero-hours contracts the option of moving to fixed hours in a major development in the debate about employee rights."......"About 80% of workers in the trial elected to stay on zero hours; of those who took up the fixed-hours option, three of five went for the maximum of 30 hours."
I'd say from that many people are happy with zero hours (students are often quoted as prime examples). However as shown here, it should be the ONLY option.
https://www.theguardian.com/business/2016/apr/15/mcdonalds-offer-staff-the-chance-to-get-off-zero-hours-contracts
"people who appreciate the flexibility of zero-hours contracts"
/Me waves.
My partner works a zero hours contract. She requested it because it gives her the flexibility to turn down work if she needs to or to pick up extra time when it's needed/available.
This means that now over Xmas she is working more or less full time but can reduce that to a few hours a week (if at all) during school holidays.
Obviously this isn't for everyone, the main reason it works for us is that I have a decent income and can support the four of us if needed, which I appreciate isn't the case for most people on zero hours contracts.
Just wanted to make the point, some people do appreciate zero hour contracts.
"MP's own shares and get paid as shareholders.
The companies using this are the ones probably paying the MP's."
Leaving aside the double use of a grocer's apostrophe what are you actually saying here?
Are you claiming that MPs, instead of being paid a parliamentary salary, are using personal service companies to get paid? If so what's your evidence for this?
Or is this a belief in some great conspiracy where only a few powerful people own all the shares and run the economy accordingly? If so then you should be aware that shareholding is a great deal more widespread than you think. Are you a member of a company pension scheme? Then, indirectly, you are a share holder. Do you have a personal pension or a life insurance scheme? Then you are a shareholder. Or almost any other form of savings? Does your employer have an employee share scheme?
In fairness, there's quite a lot of MPs who are indeed direct shareholders (or hold directorships) for public services companies, as can be found through a quick scan of the register of interests (https://www.parliament.uk/mps-lords-and-offices/standards-and-financial-interests/parliamentary-commissioner-for-standards/registers-of-interests/register-of-members-financial-interests/).
It's far from all MPs, though; the word 'shareholdings' appears 124 times, which equates to about 1 in 5 MPs. That covers any holding of over 15% of a company, or valued at over £70k. There may be others with rather more small-time holdings.
do you, donvoters live ON THIS PLANET?! Do you really believe that majority of those 40K ueber drivers just pined for the f... "employment flexibility", dreamed for years about the time they can leave their cushy 9-5s tesco till and halleluiah - their calls were answered by those "sharing" genius minds behind ueber and other shite (which parasite on original, genuine _sharing_ ideas that came up several years ago.
Yeah, SOME of those on "flexible" employment do earn more than they used to, but there's a cost to themselves, and I don't mean just money (never mind the taxman, f... the taxman, it's the i-times we live in).
And to claim gig workers "appreciate" employment flexibility is the same as banks to claim their punters appreciate the convenience of online banking, hurrah for online and mobile banking! Yes, they do appreciate it, since the f... banks closed down their f... branches to save themselves the f... cost! And this is exactly the same and ONLY reason for "gig" economy to exist - to save the owners costs related to employment that are then passed on to the average Joe (as the state has less money to burn, but also to use wisely, like on social care).
The meme seems to be that the only way to get flexible working hours is by being self employed. This is rubbish. There is no reason why you cannot be employed (maybe with more than one employer) and also have flexible hours; it should not really be much more difficult for the employer to manage.
Workers benefits (holidays, etc) are then pro-rata on the number of days actually worked in the last year (or something similar).
> Association of Independent Professionals and the Self Employed
Really? Would be interesting to know exactly who or what pays the bills for such a grand name, as it doubtful whether the average deliverooer pays membership.
Perhaps in this age of corporate lobbying and dodgy think thanks, instead of "citation needed", the call should be "full statement of accounts needed."
"Really? Would be interesting to know exactly who or what pays the bills for such a grand name"
AFAIK it's what used to be the PCG. I don't know why they came up with such a daft rebranding (except that most rebrandings are daft); I'd given up my membership when I retired so wasn't a party to that discussion able to pour copious contempt on it. But, in answer to your question: its members.
... universal income, universal taxation, no minimum wage, massive reduction in red tape (especially huge delays in benefits starting/stopping/resizing).
Then THE MARKET sets the rate at which people participate in the gig economy or any other casual work. That is really the only way to set it at the correct value. The alternatives are let-the-poor-starve anarcho-capitalism or socialist command-economy market distortions.
In my opinion we need just enough socialism to care for people and absolutely no more. You can try to do that with a huge, inefficient benefits (and tax) system bureaucracy, constantly sliding allowances and benefits (and never managing to do so fast enough). Or you could solve the system properly, with universal income: give people (just) enough to stay alive, fed, warm and well --- and let the invisible hand of the market do everything else.
The thing I notice about people who are so anti-UI is they never seem able to come up with a viable alternative. "We can't have UI as it rewards people for doing nothing" as opposed to the current system of shaming people for having nothing to do? The fact is we have a welfare system for a reason. It's so families don't starve to death. Coming from the north east I'm more acutely aware of the Jarrow Marchers than most but please, look it up. And stop reading the Daily Mail, the unemployed aren't spending your tax money on holidays to Ibiza while you slave away like a North Korean factory worker.
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