Should the self-employed be paid a minimum wage?

posted by 4 years ago in News

A think tank has called for a minimum wage for parts of the UK’s 4.8 million-strong self-employed workforce. Research by the Resolution Foundation revealed that about half of those classified as self-employed are low paid and earn less than £310 a week.

It said many self-employed workers are not eligible for the government’s ‘national living wage’ which pays £7.50 an hour for over 25’s. This stems from concern that firms could avoid paying the minimum by reclassifying workers as self-employed.

Now the Resolution Foundation is calling for the government to extend the law to reach those who are genuinely self-employed.

Who could benefit from a self-employed minimum wage?

A test would be applied to self-employed people where the price of their labour was fixed by a company. Affected firms would include gig economy-style platforms. Those helped would be 170,000 self-employed taxi workers and 40,000 postal and courier service workers. Not all but some of the 80,000 cleaners and 150,000 self-employed hairdressers would benefit from the protection.

Conor D’Arcy, Policy Analyst at the Resolution Foundation, said:

“The UK’s labour market has been very successful at creating jobs in recent years. However, far too many of those jobs offer very low pay and precious little security.

“This is especially true of the growing army of the self-employed. While many are higher earners who benefit from significant flexibility, around half fall below the low pay earnings threshold of just £310 a week. The government’s upcoming review of the workplace, led by Matthew Taylor, offers the perfect opportunity to tackle the issues of low pay and insecurity head-on.

“The government can start by extending minimum wage protections to those self-employed people whose prices are set by a firm. This would mean that self-employed people in the gig economy would be given protection against extreme low pay for the first time ever.”