Conor D'Arcy's event slides.

1. The minimum required?
Increasing protection for the self-employed
Adele Aspden, Eversheds Sutherland
Hugo Martin, Hermes
Jason Moyer-Lee, Independent Workers Union of Great Britain
AdairTurner, Institute for New EconomicThinking
Conor D’Arcy, Resolution Foundation
Torsten Bell, Resolution Foundation
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2. The minimum required?
Increasing protection for the self-employed
Conor D’Arcy
July 2017
@conortdarcy // @resfoundation
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3. The rapid growth of self-employment has been one of the labour
market stories of recent years
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4. But concerns have grown rapidly too
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5. Much of the debate around the gig economy has focused on
employment status and bogus self-employment
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6. Lack of clarity a reason why disputes on employment status are playing
out in the courts
• Need for greater clarity and awareness of rights
• Some argue for a widening of the employee definition to
include workers and some of the self-employed
• Whether or not definitions change, improved enforcement of
existing legislation a vital first step
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7. But going further and extending other rights to the self-employed
needed too
• Some changes would potentially apply to most self-
employed:
o Extending Statutory Maternity & Paternity Pay
o Extending contributory Jobseekers’ Allowance to those
who have paid Class 4 NICs at a profit level of £25k
• While other changes – like offering pay protection – would
need to be more targeted on specific groups
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8. Equalising the tax treatment of self-employed and employed labour
would cut down on bogus self-employment
• Reducing the incentive for firms to wrongly claim staff are
self-employed is key
o Eliminating Class 2 NICs and bringing Class 4 up to the 12%
employee rate
o Extending employer NICs to price-setting firms
o Scaling back the tax advantages of self-incorporation by
reducing Entrepreneur's Relief & the Annual Exempt
Amount
• Together, would help low-earning self-employed most
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9. Self-employed earn less on average and are more likely to be low paid
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10. For those who are genuinely self-employed but take work from firms
that set the prices, specific improvements possible
• Those who meet other hallmarks of self-employment but
can’t control how much they charge
• Likely to include some of those in gig economy – taxi drivers
and couriers – as well as those in more traditional sectors e.g.
hairdressers renting chairs
• Pinning down how many are affected is challenging but
many of 170k taxi drivers and 40k couriers likely to be
included, as well as some of 150k hairdressers and 80k
cleaners
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11. Approach based on current ‘piece work’ rates and test in minimum
wage law
• Firm carries out test to ensure that someone working at close
to average speed could earn at least the minimum wage
• HMRC oversight as with employees, with expanded funding
• Options on how this is implemented:
o Individual right, though creates new category of self-
employed and need to keep records
o Duty on firm, though a complaint would require self-
employed individuals to challenge
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12. Minimum wage not a silver bullet but alongside levelling tax playing
field, it would represent important step forward
• Lots of theories for rise of self-employment: tax, tech,
flexibility (one way or two way), dodging responsibilities
• Some more likely than others
• Equalising benefits and tax treatment would mean drivers
reflect genuine shifts rather than exploiting gaps
• Alongside a minimum wage extension, would mean a
genuine bolstering of rights for the self-employed
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13. The minimum required?
Increasing protection for the self-employed
Adele Aspden, Eversheds Sutherland
Hugo Martin, Hermes
Jason Moyer-Lee, Independent Workers Union of Great Britain
AdairTurner, Institute for New EconomicThinking
Conor D’Arcy, Resolution Foundation
Torsten Bell, Resolution Foundation
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