The EC's proposals on digital work platforms

On December 9, 2021, the European Commission proposed a range of measures to better protect people working on digital platforms across Europe. 

Currently, more than 28 million people work through digital platforms, with up to 43 million expected to be employed by 2025. The European Commission assumes that around 20% of so-called crowdworkers are incorrectly categorized as self-employed. These bogus self-employed workers are thus denied essential employee rights such as continued payment of wages in the event of illness, vacation entitlements or the payment of minimum wage.

To ensure that crowdworkers are assigned the right employee status, but also to protect rights of genuinely self-employed workers, the European Commission's package includes a communication on the way forward and EU actions to be taken, a proposal for a directive to improve working conditions, and draft guidelines on the application of EU competition law to collective agreements of self-employed workers.

With regard to the future assignment of the correct employee status, it should be particularly interesting that the draft directive specifies certain test criteria on the basis of which the classification of the platform as an employer is to be determined. Such criteria could be, for example, a platform-side specification of the amount or upper limit of remuneration, electronic monitoring of the employees' work performance, restriction of the possibility to freely determine working days and to freely decide whether to accept an order, the specification of certain binding rules for the appearance and behavior towards service recipients or the restriction of the possibilities to build up a customer base or to perform work for third parties. If two of these criteria are present, it is rebuttably presumed that the platform is an employer and all platform workers are employees accordingly.

In addition, platforms are to be obliged to provide transparency and traceability. Thus, employment relationships are to be registered in the respective countries in which the platform offers services and the relevant data and information are to be made available to the competent authorities. 

Employees and self-employed persons on the platforms should also be given the opportunity to track the algorithms used to distribute orders and to challenge them if necessary.

Overall, it can be expected that the way in which employee status is assigned via the classification of the platform as an employer in particular will face considerable changes and shake up the world of crowdworkers in the long term. It will also be interesting to see whether these regulations will have an impact on the national classification problem of (bogus) self-employed workers. 

Together with our worldwide Littler Global Workplace Transformation Initiative and our New Work experts, we are closely monitoring further developments.

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