The outbreak of the COVID-19 crisis has raised concerns about its impact on precarious and vulnerable workers when most of them have been at the front line during the crisis and their work has been revealed as essential. Dr Marti Lopez-Andreu, from the Work and Equalities Institute, investigates some of these key workers in areas such as logistics and transport, among others. The current COVD-19 situation adds a further layer to these workers’ vulnerabilities and brings into the debate specific needs in terms of income support and health and safety that have not been addressed by either employers or government policies. In this blog, he explains what ‘bogus self-employment’ is and examines how COVID-19 is affecting these workers.

• Workers in bogus self-employment have access to the government’s Self-Employment Income Support Scheme but it comes with issues of accessibility and fairness.
• Another issue these workers face is insufficient personal protective equipment (PPE), and the precariousness nature of their work makes it difficult for them to more secure working conditions.
• There is an urgent need to recognise their dependence on clients and platforms as their employers, and measures should be developed to reinforce employers’ responsibilities towards these workers.

‘Bogus’ self-employment refers to subordinate employment disguised as autonomous work. Some groups that have gained attention recently include those working in jobs related to the gig-economy such as couriers and private car drivers. Other more traditional groups include those working in IT, construction and railway maintenance, among others. This is also the situation of workers in the health and care sectors; for example, domiciliary carers and foster care workers. Research has identified that their working conditions are increasingly characterised by low income and precarious working conditions.

Although these workers are formally independent workers, their capacity to maintain work over time and ensure they have access to enough work is dependent on their ability to sustain their links, contact and reputation with specific physical or virtual contacts. This includes key individuals in organisations that manage outsourced tasks, agencies that manage specific labour markets (eg in construction or railway maintenance) and, most recently, their positon and reputation on online platforms based on algorithms.

Income support for the self-employed

The COVID-19 situation has generated several challenges for the bogus self-employed. Because they are classified as self-employed, they have access to the government scheme, introduced in March to compensate the self-employed for loss of income due to COVID-19. The scheme includes a grant for three months equivalent to the 80% of the average profit recorded on tax returns (based on the previous year or the last three years if there has not been activity in the last year) up to a limit of £2,500 per month for all self-employed with profits below £50,000. The scheme has been renewed from July onwards but with a lower amount (up to a limit of £2,190 per month).

Although the grant is a big step forward and is generous and comprehensive in relation to other countries, several issues affect its accessibility and fairness.

• The scheme is based on the annual tax returns of previous years and this penalises low paid workers and those who recently joined the sector, including those in sectors with a high turnover (for instance, app-based courier services) in which it is difficult to find workers with long tenure. Surviving on 80% of their income is unsustainable.
• In addition, those with a profit of less than £1,000, who are not required to complete annual tax returns, are excluded. This means that some bogus self-employed workers cannot access the scheme at all. This includes those with low profits or, for instance, those affected by tax release schemes that do no report profits; for instance, foster care workers who are recruited as self-employed workers by agencies or local authorities.
• The scheme started in March but payments from the first grant did not start until the 25 May, potentially leaving many workers with no pay for almost two months. Although they can claim Universal Credit, the access is means tested at household level and delays in payments of up to five weeks have been recently reported.

Health and safety

Another key element that has arisen relates to health and safety. During the COVID-19 crisis many bogus self-employed workers have been engaged in activities that involve high risks of contagion. Many have not received appropriate personal protective equipment (PPE) from employers. For instance, the lack of PPE has been reported by construction workers, and couriers have demanded that the necessary PPE should be provided by the platforms that employ them. The negligence of employers/agencies/platforms in failing to provide protection measures and the lack of clear protocols is highlighted by a report from the Fairwork project about the platform economy responses to COVID-19. The report shows that very few platforms in the UK and globally have provided protection equipment.

Moreover, bogus self-employed workers also face significant difficulties due to their dependence on key contacts, agencies and platforms to keep their jobs. The risk of being removed from the platform or not being called again is one of the main barriers preventing these workers requesting more secure working conditions.

Reinforcing employers’ responsibilities

The UK has needed to develop emergency measures to cope with the consequences of COVID-19 due to the weakness of its social protection mechanisms. The crisis has revealed how the UK social protection system is designed to offer workers only the absolute minimum protections and does not provide a sufficient income when dealing with the event of illness, job or income loss. Although statutory sick pay has been granted to self-employed workers, its low amount (£94.25 per week) reveals the weak safety net that exists in the UK.

Although the extraordinary grant for the self-employed is fairly comprehensive the unclear status of bogus self-employed workers and their short tenure makes them extremely vulnerable in accessing it. The dependence that characterises this status makes it difficult for workers to access/request it due to the fear of eroding future job opportunities. Moreover, this also makes it difficult for workers to claim for safe working conditions and equipment.

There is an urgent need to recognise their dependence on clients and platforms as their employers, and measures should be developed to reinforce employers’ responsibilities towards these workers. Because individual employers tend to be reluctant to develop these responsibilities by themselves (for example in terms of health and safety or providing income protection to low paid workers), a stronger regulatory role of the state is required to enforce safe working conditions and to guarantee safe spaces for workers’ claims. This could be developed by making clients and platforms more directly responsible of the health and safety of these workers and by setting up employer-funded schemes to protect them during non-income periods due to specific contingencies. Furthermore, the enforcement role of the different agencies involved should be reinforced and more coordinated mechanisms should be developed. If not, the burden of the uncertainty that COVID-19 or other potential social crises could bring will continue to be paid by the most precarious and vulnerable workers.

Take a look at our other blogs exploring issues relating to the coronavirus outbreak.

Policy@Manchester aims to impact lives globally, nationally and locally through influencing and challenging policymakers with robust research-informed evidence and ideas. Visit our website to find out more, and sign up to our newsletter to keep up to date with our latest news.