Introduction by Damian Broughton MBE, Executive Chairman of Danbro and a founding member of PRISM.
Today marks the publication of the ‘Rules of Engagement’ report, which reviews the way workers operate as self-employed or employed in our current environment. We are proud to support PRISM, who commissioned this report.
There are several other reviews being carried out this year and it is hoped that the Government will act upon many of the recommendations that ensue. The overwhelming cry from the sector is for certainty, stability and transparency. This report will help in achieving these aspirations.
About the report
“Gig economy” companies should disclose the average hourly pay received by people working via their platforms, a new report says today. The report from the Social Market Foundation (SMF) think tank says the Government should make all companies estimate and publish the average hourly equivalent payment to their staff.
This greater transparency would put social pressure on those companies to ensure workers are paid fairly. The new legal duty would apply in the first instance to organisations engaging more than 50 workers.
The new report, entitled Rules of engagement: Reviewing self-employment and employment in the UK, is part of a broader programme of work which the SMF is undertaking, looking into the position of self-employed workers in the labour market.
The report also recommends:
- The Government should design a ‘Self-employed Benefits Package’, which should provide Statutory Maternity Pay, contributory JSA and sick leave insurance to workers that save into a private pension scheme.
- The Government should introduce a ‘Hirer’s NICs’, which would start at 2% per annum and increase each year until parity is achieved with Employer NICs by 2025. This would overcome the anomaly where organisations engaging self-employed workers are exempt from 13.8% rate of Employer NICs.
- HMRC should make a virtue of visibility: pursuing more cases of non-compliance, and publicising how many firms and individuals have been pursued successfully and the value of the money recovered.
- In order for fair oversight the Low Pay Commission should be asked to oversee and scrutinise this process. Ahead of implementation, the Government should consult with contracting organisations, workers, trade unions and others on how best to devise the rules.
Nigel Keohane, SMF research director, said:
“Our proposed new rules make life fairer for the individual and the taxpayer, whilst providing greater certainty and simplicity to businesses.
“This report envisages a future where no matter how the work is performed there is greater evenness in tax treatment and in associated rights. As far as possible, we should be moving towards one form of employment.”
Crawford Temple, Chief Executive of PRISM, said:
“The SMF report has several innovative suggestions, in particular the introduction of a Hirer’s NIC. It will ensure greater balance between the traditional and modern forms of employment, as well as between employers and workers.
“This report shines a light on the ever-changing nature of today’s labour market within the gig economy. It provides a roadmap for the Government to bring the tax and legal framework in line with the new employment realities, while ensuring workers’ rights are upheld.”