The Resolution Foundation, a think-tank, has said that the government should extend all minimum wage legislation to protect the self-employed. Around 4.8 million people in the UK are classed as self-employed, including many who work within the so-called gig economy.
The Resolution Foundation has submitted a report called “The Minimum Required?” to the Taylor Review, which has been tasked with investigating modern employment practices. The report sets out a number of steps to be taken to tackle what they call “the endemic levels of low pay among the self-employed.”
The report reveals that whilst one in five of the self-employed are low-paid, which means that they earn less than two-thirds of the typical weekly earnings, the figure for the self-employed, working full-time, is 49 per cent.
The introduction of the National Living Wage will reduce low pay for employees but will have no effect on the number of low-paid self-employed because they are not entitled to receive it. The Foundation believes that unless the rules are changed to include the self-employed, some employers will see employing workers on a self-employed basis as a way of reducing wage costs.
However, the Foundation believes that the first step is to ensure that the minimum wage rules are enforced. Many of those who work in the gig economy are likely to be workers and will have more rights than the self-employed, and yet some may not be receiving the minimum wage.
For those individuals who are genuinely self-employed, the Foundation believes that the existing tests in employment law could be used to determine if a person is working at a pace that would mean they should receive at least the minimum wage.