Think tank pledges support for higher minimum wages for liquid workers

21 November 2019

A Demos think tank has asserted that flexible workers, including contractors, should benefit from a higher minimum wage rate due to the unpredictable nature of their work which could potentially result in fluctuating and crucially, low, earnings over the course of time.

Demos is an educational charity which maintains a cross-party political viewpoint. It has published recommendations that relate to the payment of liquid workers within contemporary society. A liquid worker could be a gig economy worker, someone who is self-employed, a freelancer, an agency / temporary worker, someone employed on a zero hours contract or a person with multiple jobs.

Due to the uncertainty surrounding the income levels for these types of worker, they face higher levels of risk in life, for example, they may struggle to take out a loan or to secure a mortgage as a result of their varied earnings.  The argument is that the application of a higher minimum wage in these circumstances would serve to protect workers and at least alleviate some of the stress associated with financial uncertainty that they face. It would also protect individuals should they become sick or fall pregnant as self-employed workers do not receive any occupational sick or maternity pay that a permanent employee might expect to receive from their employer. Additionally, self-employed workers receive no entitlement to holiday pay.

Author Ben Glover commented

"Self-employed workers are not protected by the safety net that many of us take for granted, from sick pay to maternity cover.

 This bargain is only fair if self-employed people earn enough to cover the additional risk they take on, but too often in Britain today this is simply not happening. That's why we are calling for a new, higher minimum wage for the self-employed."

 There have been suggestions that banks or trade unions could oversee employment benefits and holiday pay, drawing influence from the Ghent system which has been implemented in other countries, an example of one being Denmark. The system’s name is derived from the Belgian city where it was initially piloted, and it involves bodies other than the government administering benefits to liquid employees.

There was no fixed minimum wage figure for liquid workers provided as Demos confirmed that the Low Pay Commission should conduct research into this and provide the relevant rate. There were also calls for the government and banks to offer training to the self-employed on the issue of managing their finances and a recommendation to introduce an auto-enrolment scheme for the self-employed.


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