The future of work is a challenge for social security systems around the world. While participation in platform work or the “gig economy” is still relatively small – approximately one per cent of the global adult population – this is expected to grow significantly in the coming years. The risk is that platform workers are not always covered by social insurance, so a growth in the platform economy might lead to a decline in funding of social security schemes and an erosion of social protection.
Rising platform work: Scope, insurance coverage and good practices among ISSA countries, prepared by the ISSA Technical Commission on Old-age, Invalidity and Survivors’ Insurance, examines examples of good practices on how countries address this challenge in order to maintain adequate levels of social coverage for all workers. Belgium, for example, has created a new category of worker in an attempt to ensure decent working standards for platform workers. In the United States, platforms are required to submit information about workers’ earnings to tax and social security authorities to ensure adequate coverage. Uber drivers in Estonia authorize the platform to send income data to the tax authorities in exchange for simplified income reporting.
Five types of action are highlighted in the report:
- Data collection of platform activities
- Collection of workers’ social security contributions at source (i.e. from the platforms)
- Raising awareness of platforms workers of their responsibilities and benefits
- Private initiatives designed to raise the level of effective coverage
- Addressing the issue of cross-border platforms
While in the public perception of “platform work” is often associated with Uber drivers and IT technicians, in fact this economy encompasses a wide variety of workers, tasks, and platforms. Even defining the term “platform work” is problematic, as no standard classifications exist and some key terms are defined very differently between countries.
Beyond the complexity of the platforms themselves arises the question of how to categorize the workers. Are they employees? Should they be considered self-employed? Or is the solution something in between? Although some countries have chosen to create a separate status for platform workers, whether entirely new work categories are necessary remains questionable.
What is important to bear in mind is that the platform economy, perhaps contrary to expectations, encompasses both simple, low-paid jobs and highly specialized, well-remunerated tasks. Platforms can be local – i.e. providing physical services such as transport or home repair – or online, where all activities take place through the Internet. For many digital workers, working for a platform is a “side gig” in addition to their regular employment, which has implications for the level of contributions associated with that income. Online platform workers are concentrated in low- and middle-income countries, whereas their users are concentrated primarily in high-income countries.
All of these factors need to be taken into account in terms of adapting social security systems and social protection to the new world of work. While pension coverage may be the largest element of social protection, ensuring social coverage for platform workers also needs to take into account other aspects of social coverage such as paid time off, disability and safety at work.
These are crucial questions, both in terms of social policy and in terms of current and future funding of social protection schemes.
Read also our article Social security measures for the self-employed during the COVID-19 crisis, which includes measures to extend coverage to gig-economy workers.