The European Union has opened a proposal for a directive and EU legislation to regulate the digital labour platforms sector. Prior to establishing these measures, the European Commission has requested an impact report in which Ana Belén Muñoz, professor of Labour and Social Security Law at the Universidad Carlos III de Madrid (UC3M), has collaborated.
Currently, approximately 28.3 million people in the European Union work through digital platforms. 19.4% of these people do so on a regular basis and most of the wages they earn —normally, as self-employed workers— comes from these services. As this is not sporadic work, this group runs the risk of their employment status being misclassified.
Although 80.6% of workers on these platforms benefit in terms of flexibility and easy access to employment, the problems arising from misclassification of their employment status result in substantial monetary costs for EU Member States, as the low level of taxes imposed on self-employed workers means that countries lose revenue intended for their general budgets.
Thus, the report finds that general legal uncertainty prevents compliance with labour and tax regulations, as well as social protection regulations relating to lack of professional development, unpaid working time, or potential occupational health and safety risks, among others.
"The initiative has been designed to address three key issues: the legal classification of workers; the algorithm used by platforms and their composition; and implementation and transparency issues in the regulations, at a European cross-border level", says Ana Belén Muñoz, from the Labour Law, Economic Changes and New Society research group.
The report sets out a series of guidelines to determine the employment status of platform workers through a set of criteria intended primarily to encourage their conversion from self-employed to salaried workers. The study also addresses the Directive proposal concerning information and consultation on issues relating to the algorithms of these platforms. Finally, it recommends that the platforms declare their activity in the country in which they operate and make certain information about the people working through them available to national authorities.
To obtain these results, the methodology used consisted of a triangulation that combined, in addition to the review of previous regulations, the analysis of four digital work platforms: Upwork, Freelancer.com, PeoplePerHour and Guru.com; an online survey for workers on these platforms and other salaried workers in nine of the twenty-seven Member States; and interviews with interest groups.
Interviews with platform managers show that if they are forced to change their business model to make the people who provide services through them salaried workers, they would only be able to hire some of their current workers. In addition, one of the platforms interviewed, located in the delivery sector, stated that shipping costs would increase by 30-40%. However, the report insists that the objective of the proposals is to improve working conditions in digital platform work while supporting the opportunities, innovation and flexibility offered by the platform economy: "Although the current situation has certain benefits (...) the consequences of the absence of an employment relationship are far greater."
The study has received financial support from the European Union Programme for Employment and Social Innovation "EaSI" (2014-2020).