The government must act to protect people working in the so-called gig economy from extreme low pay, according to a new report.
The Resolution Foundation has called on the government to extend minimum wage legislation to protect some of the UK’s 4.8m self-employed workers, including a number that work for food delivery firms and as cleaners in the hospitality sector, as part of its drive to tackle low pay and insecurity in the modern workforce.
The proposals were put forward in a new report – The Minimum Required? - which forms part of the Resolution Foundation’s submission to the Taylor Review on modern employment practices.
It includes new analysis that shows while around one in five employees are low-paid (earning less than two-thirds of typical weekly earnings), last year around half of the full-time self-employed workforce (49%) fell below this threshold, earning less than £310 a week.
Although the introduction of the National Living Wage is set to reduce low pay among employees over the coming years, the self-employed will miss out as they are not entitled to it. The result could be more firms using self-employed contracts as a way to avoid paying the legal minimum wage, according to the think-tank.
“The UK’s labour market has been very successful at creating jobs in recent years. However, far too many of those jobs offer very low pay and precious little security,” said Conor D’Arcy, policy analyst at the Resolution Foundation.
““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.”