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“Gig economy” companies free-riding on the welfare state

Article by: Makbool Javaid | Published: 18 May 2017

A Work and Pensions Committee report has called on the Government to close loopholes that are allowing “bogus” self-employment practices which burden the welfare state and reduce the tax contributions. The Committee heard from “gig economy” companies like Uber, Amazon, Hermes and Deliveroo, and from drivers who work with them. The Committee say that the apparent freedom companies enjoy denying workers the rights that come with “employee” or “worker” status fails to protect workers from exploitation and poor working conditions; it also leads to substantial tax losses to the public purse, and potentially increases the strain on the welfare state. The Committee take the view that an assumption of the employment status of “worker” by default, rather than “self-employed” by default, would protect both those workers and the public purse.


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