European Commission’s New Directive for Digital Labour Platforms
The time has come to convert your contractors into employees
European Commission’s new directive for digital labour platforms is going to change the way you classify your or your clients’ workers. The gig economy brought about by recent advances in technology and accelerated by global lockdowns has catapulted from a novel way of working to a full-blown digital platform economy. In 2021, the EU boasts over 28 million people working remotely, and that number is projected to reach 43 million in 2025.
In the interest of protecting remote workers and leveling the playing field for the self-employed, the European Commission is proposing sweeping oversight and regulation of the digital platform economy. For international businesses who rely on a flexible globally distributed workforce, the EC’s proposals can mean government interventions that dramatically increase compliance risks.
Misclassification of workers is becoming a major issue, with large companies like Lyft, Uber, and Instacart facing serious class action lawsuits. With increased government oversight, global companies doing business in the EU may become subject to massive fines and penalties, and costly restructuring of their business models.
On December 9, 2021, an EU directive was released by the EC, outlining its plans for future regulations that will impact gig workers and their global clients across the European Union. Reclassification of some 5.5 million remote workers as employees is anticipated, which is likely to bring about hundreds of legal cases across the 27 affected EU member nations.
Whether engaging global personnel for themselves or for their global clients, international businesses would be wise to get ahead of this new directive and similar novelties by beginning the reclassification process before it is forcibly imposed.
As the responsibility to correctly classify the workers rests fully on yourself, today’s high time to spotlight the reasons for converting your current contractors into employees and offering an employee status to newly selected ones. An option in the past turns into a MUST for you today.
As always, Acumen International is poised to take action on your behalf, to facilitate the process of converting your contractors to employees. Besides compliance and insulating your business from misclassification settlements, transferring your independents into employees via our Global PEO solution gives you additional benefits like:
- focused personnel
- increased retention
- competitive advantage to attract the best global talent
With us, innovate the way you engage and compensate your or your clients’ global workforce, and how you classify your workers to streamline their contribution to an overall company strategy.
Define who’s the best fit for your own or their companies, and why offering an employee status is a win-win for both an employer as well as a contractor today.
Contact Acumen’s team of global experts today, and stay on the cutting edge of global HR as it evolves in the digital age. Turn your contractors into employees to stay in compliance with ever-changing in-country regulations and avoid legal and financial risks, and time losses in the long run.