Europe Inches Closer To Insisting Gig Workers Are Treated As Employees

Millions of contractors for digital platforms – often referred to as gig workers – may soon be classified as employees in the European Union.

The European Council and the European Parliament on Wednesday announced a provisional agreement, after two years of negotiation, designed to clarify the employment status of such workers. These are the people who sign up to apps to deliver takeout, do DIY work, and perform other tasks for users.

"Currently, the majority of the EU's 28 million platform workers, including taxi drivers, domestic workers and food delivery drivers, are formally self-employed," explained Yolanda Díaz, Spanish vice-president and minister for work and social economy, in a statement.

"Nevertheless, a number of them have to abide by many of the same rules and restrictions as an employed worker. This indicates that they are in fact in an employment relationship and should therefore enjoy the labor rights afforded to employees under national and EU law."

According to a 2021 European Commission analysis, most of the 28 million platform workers in the EU are self-employed, but about 5.5 million may be wrongly classified.

The directive [PDF], which still needs to be adopted by EU member states, provides guidance on how to determine the employment status of those working for digital platforms, and constrains the use of algorithmic systems for worker management.

It also sets rules that mean digital platform workers will be considered employees if at least two of the following five conditions are met:

• If the employer caps worker payments;
• If the employer supervises worker performance, directly or electronically;
• If the employer has control over the distribution or allocation of tasks;
• If the employer has control over working conditions and working hours;
• If the employer limits discretion about how work is done, appearance, or conduct.

The agreement also requires human decision making when employers dismiss staff or suspend their access to platforms, to prevent the unchecked use of algorithmic personnel management.

Notably, it forbids the use of personal data for:

• Creating emotional or psychological profiles;
• Analyzing private conversations;
• Predicting union activity;
• Inferring protected characteristics like racial origin or political opinions;
• Using biometric data, except for authentication.

The European Trade Union Confederation (ETUC) hailed the provisional agreement, while warning that the text waits final edits and implementation.

"We still need to scrutinize the final text of this agreement closely, but what is clear is that there is a genuine attempt to address the grave problems that working people face," declared ETUC confederal secretary Ludovic Voet in a statement. "Platform companies have forced delivery riders, taxi drivers and other workers, including carers and cleaners, into false self-employment in order to avoid paying holiday pay, sick pay or social security."

The struggle over wages and labor practices has been a constant as long as there have been workers and employers. The digital battlefront opened around 2005 with the emergence of cloud platform services like Airbnb, Amazon Mechanical Turk, Lyft, and Uber, which classified workers as independent contractors and thus avoided paying for worker benefits and employment taxes.

The employment status of digital platform workers is of enormous financial consequence – both to workers and to the platforms that hire them. While various national tax and employment agencies offer guidance about worker classification, their respective tests to determine employment status, and associated labor laws, are not always clear or well-suited to address digital platform work.

In the US, digital platform companies have been largely successful in preserving their ability to classify workers as independent contractors. In California, for example, DoorDash, Lyft, and Uber waged a successful ballot measure campaign and subsequent court battle to convince voters to support their labor practices.

Lyft and Uber did not immediately respond to requests for comment. ®