Workforce Development

Britain responds to the changing nature of work

July 28, 2017  • Ethan Pollack & Conor McKay

The United States is not the only country grappling with the rapidly changing nature of work. Globalization, technological innovation, automation, and shareholder pressure on public companies to deliver quarterly profits are transforming economies around the world. Companies are increasingly relying on independent, temporary workers rather than traditional, stable employees, causing many countries to wrestle with how to ensure that their workers receive the benefits and protections that they need.

Britain is a good example. While the majority of British workers are still in traditional full-time employment, self-employment and part-time work are growing as a share of total work. And this trend only seems to have accelerated following the recession. Since 2008, gains in part-time work and self-employment in the UK account for almost two-thirds of all job growth, despite these categories accounting for just 37 percent of the workforce. Meanwhile, online platform work — while still small — could grow as a share of all work. According to survey data, an estimated 4 percent of workers participate in the gig economy, while an additional 12 percent of working-age adults say they are considering gig work over the next year.

These trends come in the context of broader labor market challenges, including stagnant wages, modest productivity increases, skill mismatches, and the growing impact of automation. To address these challenges, Prime Minister Theresa May appointed former Tony Blair policy chief Matthew Taylor to lead a review of the changing nature of work in the UK. The 116 page report — Good Work: The Taylor Review of Modern Working Practices — proposes reforms to protect vulnerable workers, in particular non-traditional workers such as those earning income through online platforms (e.g. companies like Uber and Lyft that serve as an online intermediary between the customer and the worker). Many of the report’s conclusions and recommendations echo those discussed in the Future of Work Initiative’s Toward a New Capitalism and the Portable Benefits Resource Guide reports. Key proposals include:

  • WorkerTech Catalyst: The report calls for creating a “WorkerTech Catalyst” — a multi-stakeholder public-private partnership aimed at identifying, piloting, and accelerating tech solutions to provide new protections and tools for non-traditional workers, including portable benefits.
  • Voice for the Self-Employed: The report urges the government to actively support technology that facilitates self-employed workers’ organizing and collective action, and to work with employers to make sure such action is encouraged.
  • Greater Disclosure of Corporate Workforce Policies: The report calls for greater corporate disclosure of workforce policies such as scheduling and training opportunities. This would empower workers, consumers, and investors to choose businesses that are aligned with their values, thus creating an incentive for businesses to compete on the basis of worker-friendly policies.
  • ‘Dependent Contractor’ Classification: While Britain already has three classifications for workers — employee, worker, and self-employed — the report proposes renaming the nation’s ‘worker’ classification as ‘dependent contractor,’ and updating the criteria to better fit with new forms of work. The new category would include some non-traditional workers, like those participating in platform work, who may have previously been considered self-employed. Workers who find themselves newly in this category would be afforded protections and benefits such as paid time off and sick leave. This proposal is similar to a proposal by former Council of Economic Advisers chair Alan Krueger and former acting Secretary of Labor Seth Harris to create a third employer classification in the U.S.
  • Wage Transparency for Platform Work: Estimating hourly earnings through platform work can be a challenge, as much of it depends on customer demand at any given time. The Taylor Review proposes requiring platform companies to provide real-time expected earnings data to their workers to increase transparency, and help independent workers in their decision-making when considering when and when not to work.
  • Predictable Scheduling: The review proposes a number of reforms to help protect vulnerable workers from the challenges of unpredictable and on-call scheduling. One idea is to give workers the right to request a contract that guarantees a minimum number of hours per week, and to require companies to disclose how often they accept such requests. The review proposes a higher minimum wage for hours worked above the number guaranteed by contract, to compensate the most vulnerable workers for last-minute scheduling decisions.
  • Paid Leave Reforms: The Taylor Review proposes allowing dependent contractors to take extra pay upfront instead of accruing leave, arguing that the flexibility may better suit workers in casual arrangements and those working for platforms. It also proposes reforms to include many non-traditional workers with less stable employment that are currently excluded from paid leave benefits (as discussed in our blog on paid leave last week).
  • Support for Self-Employed: The Taylor Review proposes that government expand support for the self-employed, including assistance to unemployed workers considering a move into self-employment, such as that provided by the U.K.’s New Enterprise Allowance (NEA). In the U.S., Self-Employment Assistance (SEA) (offered in a handful of states) serves a similar purpose — unemployed workers can receive SEA in lieu of traditional unemployment insurance if they are starting a business.
  • Portable Reputations for Platform Work: For workers using platforms to access work, building up positive reputational data and online ratings is often a key to success and can take time and effort to achieve. But when workers leave a given platform, those ratings are often left behind. The Taylor Review proposes encouraging platform companies to enable workers to carry their approval ratings with them when they move from the platform and to share them with third parties.

In announcing the review, May said, “Improving the security and rights of ordinary working people is a key part of building a country and an economy that works for everyone, not just the privileged few.” Balancing flexibility and security for independent workers, ensuring all workers have access to the skills and training to thrive in tomorrow’s labor market, protecting workers from corporate short-termism, even facing down the distrust in institutions sewn by decades of stagnant wages, rising inequality, and policies that have left behind the working class are not unique to our country. The Taylor Review offers proposals that could help our own policymakers. As the independent workforce becomes larger here and abroad, it’s important that governments pay more attention to the rising challenges facing modern workers and work collectively to find solutions.