EU strikes deal classifying some gig workers as employees

BRUSSELS — After two years of negotiations, the European Union has settled on how to determine the job status of ride-hailing drivers and food delivery bike couriers.
After the launch of app-based services such as Uber and Deliveroo about a decade ago, the question of whether their so-called gig workers are independent contractors or employees emerged as one of the most contentious topics in the European labor market. The number of people working through platforms meanwhile grew from 28 million in 2021 to a projected 43 million in 2025.
EU legislators struck a deal early Wednesday that could classify some of these workers as employees instead of independent contractors, granting them more social rights and benefits, and impacting platforms’ business models.
The deal follows two years of excruciating talks.
EU legislators had to strike a balance. On the one hand, platforms claimed drivers and couriers value the flexibility of just turning on an app to work and therefore should be independent contractors. On the other, some workers’ groups and unions said gig workers are effectively employed and should have access to entitlements like minimum wage and holiday pay.
The legislators took the middle path: When there’s some indication of a platform’s control over a worker, there’s a case for the worker to claim to be employed.
Negotiations centered around a provision included in the European Commission’s proposal that gig workers should be presumed to be employees when certain conditions are met.
This “legal presumption” was initially shaped by the EU executive as a list of five criteria to determine whether a platform exerted control over a gig worker: control over remuneration, appearance, performance, organization of work, and the ability to work for others. If two out of five were met, the presumption of employment kicked in.
For proponents of the presumption, it was a more than welcome shift from a situation in which companies could unilaterally decide a gig worker’s job status, and that it was up to the workers to fight the status in court if they didn’t agree.
“The bill should make it easier than an enormous court case, which takes years, to just get your rights,” said Dutch Greens’ member of the European Parliament Kim van Sparrentak, who worked on the bill. A gig worker’s job status is no longer decided based on a company’s claim, she argued: “We’re going back to the facts. Are you factually an independent contractor or not?”
But, EU legislators had a hard time agreeing on which “facts” should be taken into account. Lawmakers and EU countries’ delegates took an opposite approach to the list of criteria to take into consideration when assessing a gig worker’s job status.
The European Parliament removed the criteria altogether, sparking fears among platforms of an “automatic reclassification” of every single gig worker, while the Council added more — effectively raising the bar for a gig worker to be reclassified.
The final stretch of the negotiations focused entirely on how to reconcile these positions. Ultimately, the criteria was watered down to mere “indicators,” but still at the threshold of two out of five.
While the text tries to “objectify” the gig workers’ status, it’s an open question of how many of them will be reclassified.
EU countries first have two years to transpose the directive into their national rulebooks. There’s also some leeway for them to be more ambitious, and national labor authorities also can claim an active role in the reclassification of gig workers.
Under the original Commission proposal there was an estimate that up to 4.1 million platform workers were up for reclassification as employees. But the legislators significantly tweaked that proposal.
There’s also a risk that platforms will try to dodge the bullet, Jitse Groen, CEO of food delivery platform Just Eat Takeaway, a company that already directly employs its workers, said in an interview with POLITICO ahead of the final negotiations.
“If I look at the bill, you look at for example the criteria … you can quite easily circumvent these, which is what platforms certainly will try to do,” he said.
Less controversial were the rulebook’s requirements around “algorithmic management” — when your boss is an algorithm inside an app. Under the new rules, platforms will have to be more transparent about how their algorithms work.
It’s a chapter that could set the tone for the rest of the economy. AI on the work floor was already singled out by several EU executives, such as Jobs Commissioner Nicolas Schmit, as a big theme for the next Commission mandate.