Minimum wage should cover some self-employed

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A Resolution Foundation report argues for a better pay deal for gig economy workers

The government should extend minimum wage legislation to certain areas of the UK’s self-employed workforce as part of its drive to tackle low pay and insecurity in the modern workforce, according to a new report published by the Resolution Foundation.

The Minimum Required? – which forms part of the Resolution Foundation’s submission to the Taylor Review of modern employment practices – sets out a number of proposals to tackle endemic levels of low pay among the self-employed. The report found that while around one in five(21%) employees are low-paid (i.e. earning less than two-thirds of the UK typical weekly earnings), last year around half (49%) of the full-time self-employed workforce fell below this threshold, earning less than £310 a week.

The introduction of the National Living Wage is set to reduce low pay among employees over the coming years. However, the self-employed will miss out as they are not entitled to it. The Resolution Foundation warned that unless low pay protection rules are changed firms could use self-employed contracts as a way to avoid paying the legal minimum wage.

Speaking at the launch of the report, Conner D’Arcy, policy analyst at the Resolution Foundation, highlighted how the rights of self-employed people have been coming under closer scrutiny. “The number of people who are self-employed has increased decently over the past 10 years,” he said. “We used to ask if these people were self-employed because they couldn’t find other employment, or if it was by choice.

“Now the conversation has moved on. We need to be asking if this [rise in self-employment] is a good thing, and what we can do to help them in their long-term interests.”

However, Jason Moyer-Lee, general secretary of the Independent Workers Union of Great Britain, argued that further legislation to protect workers is useless unless it is enforced. “At best this proposed approach is flawed,” he said. “At worst it could make things much worse for the self-employed.

“Most people in the gig economy, in my experience, have been bogusly categorised as independent contractors. The law, as it currently stands, is in favour of these workers, but employers face no consequences whatsoever if they ignore that.”

He suggested a better approach would be to start properly enforcing current laws. “We need the government to fine employers who disobey the law, and to eliminate tribunal fees,” he said. “When it’s nearly impossible for workers to access a tribunal and there’s no government enforcement, it’s no surprise that gig economy businesses are blatantly disregarding the law.”

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