New European Union draft rules propose a reclassification of potentially millions of gig workers to employees, entitling them to higher wages, benefits and more.
The European Commission, the EU's executive branch, estimated this could reclassify up to 4.1 million gig workers for digital and app-based services such as ridesharing and meal delivery.
Under the potential new measure, if a company meets two of the following criteria, they will be classified as an "employer": deciding pay; supervising workers' performance; making decisions on workers' appearance or conduct; limiting workers' ability to work for others or develop their own client base; or restricting workers' ability to choose hours, jobs and subcontractors.
Once a company is a designated "employer," the gig worker will become a designated "worker," which entitles them to minimum wage, pension, paid vacation and unemployment and sickness benefits.
European Parliament, the EU's law-making body, still needs to vote on whether to put the rules into effect.
While some digital platforms support the proposed rules, others worry it could affect workers' flexibility. EU Jobs and Social Rights Commissioner Nicolas Schmit said the rules are all about "ensuring that these jobs are quality jobs."
"No one is trying to kill, to stop or to hamper this growth of the platform economy," Schmit said at a press briefing in Brussels, adding "we don't want this new economy just giving low quality or precarious jobs."
Gig economy workers and platforms have fallen between the cracks of existing employment legislation, and the measures being considered by the 27-nation bloc, which would take years to come into force, are aimed at clearing up those gray areas.
App-based gig work platforms have boomed in the digital economy, especially during the COVID-19 pandemic when demand for food delivery services mushroomed. While the apps provide short-term work for millions of people, their rampant growth has upended traditional labor and business models, resulting in showdowns between companies and regulators worldwide. Gig work's flexibility is a selling point for many, but workers also complain that they end up making less than minimum wage after expenses or waiting time are accounted for.
Uber says it's committed to improving work conditions but worries about the EU proposal "putting thousands of jobs at risk, crippling small businesses in the wake of the pandemic and damaging vital services that consumers across Europe rely on."
"Any EU-wide rules should allow drivers and couriers to retain the flexibility we know they value most, while allowing platforms to introduce more protections and benefits," a statement from the ride-hailing service said.
Amsterdam-based Just Eat Takeaway, which operates in 25 countries and owns brands including GrubHub, said it "welcomes and fully supports" the proposals and hopes they will provide companies across Europe with "clarity and a level playing field." Unlike other food delivery platforms, the company's riders are employed as staff, which it says "proves that providing flexibility doesn't have to come at the expense of workers' rights."
The European Commission estimates some 28 million people on the continent are self-employed on digital platforms, rising to 43 million by 2025. The EU has taken a leading global role in cracking down on tech companies to ensure everything from workers' rights to online safety.
Platforms can challenge the classification, but the burden will be on them to prove they are not employers, the commission said.
The proposed EU rules are another blow for gig economy companies in Europe. New laws or recent court rulings in Spain, the Netherlands and Britain require food delivery riders and ride-service drivers to be given employee status rather than classified as self-employed freelancers.
The European Commission also wants to force gig work platforms to be more transparent about the algorithms used to manage workers so they can better understand how jobs are assigned and pay is set. People should oversee the algorithms and workers should be able to appeal any automated decisions, it said.
In Spain, gig worker Sebastián Honorata, who makes deliveries by motorbike, said a new national law introduced this year hasn't resulted in the benefits the government promised. He said it's unfair because it only regulates food delivery riders, while others like Amazon package delivery drivers aren't covered.
And instead of hiring gig workers directly, foreign tech platforms in Spain resorted to temporary staffing agencies. Honorata, a spokesman for the Association of Freelance Riders, said he used to bring in over 1,600 euros ($1,800) a month after paying his social security costs but now makes 900 euros in a good month.
Honorata, who lives in the southern Spanish city of Granada, said delivery workers should be regulated the same way across Europe but worried Brussels' approach could produce results similar to Spain's model.
"What we wanted was not to be an employee, nor completely freelancers. We wanted an intermediate model, like they have in California," Honorata said. Before the Spanish law, gig work "was an economically viable model, even if it had a murky legal status. We wanted to give it a legal framework, but not lose any of its viability. Now, it is a disaster."
The Associated Press contributed to this report.
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
