Digital labor platforms: expected EU-wide regulation

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Decent working conditions to people working through digital labour platforms are the aims of a new EU directive. The idea has been supported by a political agreement between the European Parliament and the EU member states on improving working conditions in platform work; the directive drafted by the Commission already in December 2021. The directive will both stimulate the digital platforms to grow and protect platform workers’ rights.  

   The platform economy has slowly but persistently transforming socio-economic fabric and labour relations in most states around the world. So-called “platform workers”, at the same time, have to acquire the same labour and social standards that offline companies adhere to. The new rules that the European Commission drafted two years ago intended to provide fairness for both online workers and companies without sacrificing the flexibility of the platform business model. Platform workers will also understand better how digital decisions are taken, which will provide them with the legal certainty throughout the EU. Besides, for the first time ever, consumers will continue to enjoy access to platform services at their fingertips, noted Commissioner for jobs and social rights in a re3cent press release.

   Digital labour platforms are internet-based companies that intermediate and organise the work provided by workers or self-employed people to third-party clients: over 500 digital labour platforms are currently active in the EU. They create opportunities for businesses, workers and self-employed, as well as improved access to services for consumers. However, these platforms also encounter challenges due to different laws and court rulings across the EU, hindering their ability to expand their business across borders.
Reference to:

   People working online shall be aware of digital decisions and algorithmic management, both existing and perspective. The idea is to increasing legal certainty as well as supporting sustainable growth of digital labour platforms in the EU. The EU decision-makers want to make sure that digital workers meet already existing companies’ labour and social standards.
Digital platforms are becoming vital instruments in modern digital economy; they play an important role in socio-economic development, in promoting innovation and offering valuable job opportunities. Now it is time to accompany “platform workers” by increased legal certainty in working conditions and solid social protection for people.

Digital labour platforms have entered numerous economic sectors: some offer services “on-location”, such as ride-hailing, delivery of goods, cleaning or care services; others operate solely online with services such as data encoding, translation or design. Platform work varies in terms of level of skills required as well as the way the work is organised and controlled by the platforms.

The draft’s content
In the proposal for a directive on improving working conditions in platform employment, the Commission stressed that digital labour platforms have become an important element of the newly emerging social and economic situation: e.g. revenues in the EU-wide digital labour platform economy is estimated to grow five times in the coming years.

The draft addressed three main issues:
= classification of employment status of people working through platforms; thus, platform workers have to labour and social rights associated with their “worker’s status”: i.e. minimum wage, collective bargaining, working time and health protections, paid leave, unemployment and sickness benefits, etc.
= fairness and transparency of algorithmic management practices applied by labour platforms; and
= enforcement, transparency and traceability of platform work, including in cross-border situations. The directive specifies obligations for platforms to declare work and to provide information about their activities and the people working for them to national authorities. This will allow the EU states to have clearer picture of the number of platform workers and their situation, empowering national authorities to enforce existing obligations by platforms, including those related to social security contributions.
Source: file:///C:/Users/Eugene/Downloads/COM_2021_762_1_EN_ACT-1.pdf

   Presently 28 million people working through digital labour platforms will increase in 2025 to about 43 million. Nine out of ten presently active EU-wide digital platforms classify working people as self-employed; most of them are genuinely autonomous in their work and can use platform work as a way to develop their entrepreneurial activities. This self-employment sector is already making a positive contribution to job creation, business development, innovation, accessibility of services, and digitalisation in the EU.

   Hence, digital labour platforms are often referred to as “algorithmic management”; while it is used in a growing number of a wider labour market, it is clearly inherent to digital labour platforms’ business model, which effectively matches supply and demand in platform work. Algorithmic management is a relatively new in the world and in the EU (in data protection rules); it is largely unregulated sphere of platform economy that poses certain challenges to self-employed working through digital labour platforms.
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   After the formal approval of the agreement by the European Parliament and the Council, the EU states will have two years to incorporate the EU Directive into national law.


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