Europe Lays Out a Plan to Flip the Odds on Gig Economy Exploitation

Legislators in the EU have formally proposed laws for the gig economy, with the goal of improving circumstances for platform workers throughout the bloc, particularly by developing a framework to combat fraudulent self-employment. The Commission’s overarching goal is to level the playing field between traditional businesses and gig platforms, as well as between different gig platforms (or “digital labor platforms,” as the draft text refers to them) by enforcing minimum standards for platform workers in areas such as pay, conditions, and social protections.

EU legislators also seek to strengthen the visibility and “traceability” of platform labor by requiring platforms to report activity to national authorities — to help enforce legal requirements throughout the union and guarantee social security payments paid where the job really performed. With a set of transparency initiatives, they are also taking steps to encourage algorithmic accountability and fairness in the business.

“With more and more employment being produced by digital labor platforms, we need to ensure fair working conditions for all individuals who get their income from such activity,” EVP Margrethe Vestager said in a statement. 

Our proposal for a Directive will assist fake self-employed platform workers in accurately determining their employment status and enjoying all of the benefits that entails. Genuine self-employed people on platforms will be safeguarded by increased legal certainty about their position, as well as additional protections against algorithmic management’s dangers. This is a significant step in the direction of a more social digital economy.

Before becoming EU legislation, the directive will need the support of the European Parliament and the governments of the EU’s member states, as well as the European Council’s approval. However, at a news conference today, the Commission emphasized that MEPs had shown widespread support for measures to safeguard gig workers.

It also stated that a number of Member States had pressed it to take action. While the draft language mentions one motivation for countries to join, it also predicts, “The Member States would benefit from higher income in the form of extra tax and social protection payments.”

The Commission will give the Member States two years to transpose the guidelines into national law after they are enacted, so application and enforcement will not happen until 2024 at the earliest. While the Commission estimates that 43 million persons in the EU would work through digital labor platforms by 2025, up from roughly 28 million presently. In addition, one of the main reasons for taking action is the gig economy’s rapid expansion.