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UK government warns gig economy companies that they may be operating illegally | gig economy

UK government warns gig economy companies that they may be operating illegally | gig economy

 


Gig economy companies that supply freelance workers to shops, restaurants and warehouses may be operating illegally, the government has warned after a series of Observer reports.

Employment rights minister Justin Madders last week wrote to YoungOnes and Temper, which provide thousands of self-employed workers to UK businesses, saying their business practices may breach employment law and recruitment agency regulations. .

In a letter almost identical to the Dutch-owned platform, Madders said fake self-employment was completely unacceptable and that it would not hesitate to call on all relevant authorities to scrutinize employers or institutions that appear to be engaging in exploitative behavior.

Madders is concerned that freelance workers on the platform are not receiving employment rights. He added that it was unacceptable for businesses to claim people were self-employed without indicating the reality of the relationship.

He demands that the chief executives of YoungOnes and Temper confirm the steps their companies are taking to comply with the laws governing employment status and employment agencies in the UK.

Employment Rights Minister Justin Madders is concerned about companies exploiting gig economy workers. Photo: Peter Marshall/Alamy

The letter comes after the Observer revealed that venue staff were waiting for payment over the Christmas period after they refused to pay Eternals to get them paid within three days.

The increasing use of gig economy workers in the retail sector, who lack basic employment rights, has been described as concerning by the TUC.

The new payment system has led to additional complaints about YoungOnes. Workers who refuse to pay commissions to get paid quickly will have to wait for clients to pay Eternals, which can create hardships for gig workers who can't rely on their regular pay packets to pay their bills.

One employee, who asked not to be named, said he was still waiting to be paid for work he completed a month ago. He said: The company was terrible to deal with and sent me a blunt reply essentially saying they hadn't been paid either. So it's not that bad. The difference is that I'm a guy trying to supplement my wages and make a living through gig work, and they're a huge company that profits from it.

YoungOnes sent a message to its employees after they complained. The idea was that there was always a small risk if the customer didn't pay the bill because they had chosen the option of waiting for the customer to pay.

Madders has asked the Employment Agency Standards Inspectorate to investigate YoungOnes and Temper.

The letter adds that we believe your business is an employment agency and that if the laws and regulations apply to you, some of your business practices that we have noted are likely not in compliance with the law.

Dispatched workers have various employment rights, including holiday pay and 20-minute breaks if they work more than six hours. However, workers who are treated as self-employed do not receive these protections.

Last week, the Observer discovered that Eternals was offering six-hour shifts without a break in stores, kitchens, restaurant offices and warehouses.

A restaurant in London was looking for a kitchen porter to work 9 or 12 hours, but the YoungOnes app said there were no breaks.

A warehouse in Glasgow was looking to recruit five warehouse workers to work 8.5-hour shifts for 12 hours per hour without breaks, while a London store offering $12.50 per hour was looking for a retail assistant to work 11 hours without breaks on the app.

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Madderss' letter also references a now-deleted Temper briefing for hotel guests claiming freelancers are not subject to fair tipping laws, which was first reported by the Observer. He wrote that the workers you provide through the platform are likely to be agency workers and therefore subject to the Employment (Tips Quota) Act 2023.

There are growing concerns that companies could hire gig workers to avoid a number of new rights in the Employment Rights Bill.

Keir Starmer faced calls at Prime Minister's Questions this month to introduce a single legal status for workers to prevent further abuses of employment law.

Former shadow employment rights secretary Andy McDonald has warned Keir Starmer that gig economy workers are being denied their rights. Photograph: Danny Lawson/PA Archives/PA Images

Andy McDonald, Labour's shadow employment rights secretary, told Starmer that precarious work denies workers' rights. Having a single status as workers would help end such abusive practices, he said.

YoungOnes said it responded to Madders' letter. It said employment rights laws and employment agency regulations do not apply to the company. James Med, YoungOnes' Chief Operating Officer, said that while neither framework applies to YoungOnes, we continue to be aware of, respect and understand these laws and regulations.

Medd said the platform does not offer or assign shifts, but instead companies post gigs and freelancers choose what suits them.

Medd said: They have full transparency about their working hours, their pay is negotiable and it is entirely their choice whether to accept it or not.

The company said it offers freelancers a variety of clear payment options to choose from based on their individual needs. When applying for a gig, freelancers can check a company's average payment rate so they have a complete idea of ​​the expected timeline, Med added.

Temper said he welcomes the opportunity to work constructively with the Commerce Department. Temper operates with full confidence in the legitimacy of its model, which has been rigorously evaluated in the Netherlands and the UK. The spokesperson said: “We have a firm commitment to ethical practices, transparency and a positive contribution to sustainable labor markets.

This article was amended on January 25, 2025 to further clarify references to Eternals' gig workers paying to receive their wages immediately, as noted in a previous version. A fee is required to receive wages within 3 days. Otherwise there is the usual 30 day payment period.

Sources

1/ https://Google.com/

2/ https://www.theguardian.com/business/2025/jan/25/gig-economy-firms-warned-by-uk-government-they-may-be-operating-illegally

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