After a two-year process, Brussels has given the (almost) definitive green light for the first European law on digital workers such as passengers on online platforms or taxi drivers. The aim is to guarantee more rights to these workers, especially social rights, by combating primarily the phenomenon of fake VAT numbers, that is, workers who are independently contracted despite having a de facto employee relationship with the company. Moreover, there are stricter rules regarding companies’ use of algorithms to monitor workers.
How many platform workers are there?
More than 500 digital work platforms with a turnover of 20 billion euros are active in the European Union. There are approximately 28 million employees in this sector (riders, taxi drivers, as well as computer scientists). The number is expected to reach 43 million in 2025. The bulk of employment in Europe, however, often earns starvation wages: the European Commission writes that around 55% of workers on platforms earn less than the minimum hourly wage of the country in which they work.
Fake freelancer
90% of European platform employees have a VAT contract. According to various estimates cited by the EU Commission itself, there are 5.5 million fake self-employed workers. On average, people working through platforms spend approximately 9 hours per week on unpaid activities (e.g., research activities, waiting for assignments) and 12.6 hours per week on paid activities. Those who seek justice to have their true status and associated rights recognized often face unclear regulations. Therefore, there is a need to establish rules and criteria valid for all of Europe.
How to define an employee?
More precisely, the main point of the law, which is a directive, is the recognition of employees. Under the new rules, for example, if a rider believes that the VAT contract does not suit his status and wants to receive a contract as a sub-employee, he will be able to appeal to the relevant authorities. It will be the employer’s responsibility to demonstrate, if necessary, that the relationship is not secondary.
There are five criteria to determine the type of relationship:
- maximum limits on the amount of money employees can receive;
- control of their progress, including by electronic means;
- control over the distribution or assignment of tasks;
- control of working conditions and restrictions on the choice of working hours;
- restrictions on freedom to organize work and rules regarding appearance or behavior.
If at least two of these criteria are present in the employment relationship, the platform will need to sign an employee contract. The European Parliament explains: “It guarantees the same level of protection for persons working through the platforms, even if the platform chooses to use an intermediary company. In such cases, Member States should establish liability mechanisms and ensure effective access to remedies, including joint liability systems where appropriate.” about”.
Algorithms
The directive is not limited to contracts, but also addresses the issue of algorithms that platforms use to monitor workers and make choices about their use. The new rules force companies to ensure “human oversight of automated systems to ensure compliance with working conditions” and give workers “the right to object to automated decisions such as closing or suspending accounts.”
In addition, platforms will not be able to process data on someone’s emotional or psychological state or use AI tools to predict, for example, whether workers plan to join a union or go on strike. People working on different platforms will retain the right to transfer their data from one platform to another, thus ensuring data portability and seamless transition between platforms.
“This is a revolutionary agreement and the first legal framework for digital platform workers,” says PD MP Elisabetta Gualmini. “We have transparency and accountability for algorithms, we have better rights for the least protected workers in the world, and we have fair competition for platforms,” Gualmini concludes.
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Source: Today IT
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
