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Vulcan Insight | European Commission proposes measure to tackle gig economy

Long-awaited draft legislation was published on Thursday of this week, with the European Commission saying that the burden of proof on employment status would shift from individuals to companies. Up until now, gig economy workers have had to go to court to prove they are employees, or risk being denied basic employment rights. Under this draft legislation, gig economy companies operating in the EU such as Uber and Deliveroo, must ensure workers get a minimum wage, access to sick pay, holidays and other rights.

The Commission’s goal is to a create a level playing field between traditional businesses and gig platforms. Commenting in a statement, European Commission Vice-President Margrethe Vestager, said: “With more and more jobs created by digital labour platforms, we need to ensure decent working conditions for all those deriving their income from such work. Our proposal for a Directive will help false self-employed working for platforms to correctly determine their employment status and enjoy all the social rights that come with that. Genuine self-employed on platforms will be protected through enhanced legal certainty on their status and there will be new safeguards against the pitfalls of algorithmic management. This is an important step towards a more social digital economy.”

In the EU’s 27 member states, over 28 million people work through digital labour platforms. In 2025, this number is expected to reach 43 million. The vast majority of these people are genuinely self-employed. However 5.5 million are estimated to be incorrectly classified as self-employed.

Digital labour platforms create opportunities for businesses, workers and self-employed, as well as improved access to services for consumers. However, new ways of work also come with new challenges and it has become increasingly difficult to correctly classify the employment status of people, leading in some cases to inadequate labour rights and social protection. Several cases have been brought to EU courts over the last few years

The Commission’s proposal will now be discussed by the European Parliament and the Council. Once adopted, Member States will have two years to transpose the Directive into national law.

Compliments of Vulcan Consulting – a member of the EACCNY.