The US securities regulator has proposed a pilot program to allow tech firms such as Uber and Lyft to pay gig workers up to 15% of their yearly compensation in equity rather than cash, a move that it said was made to reflect fluctuations in the workforce.
The Securities and Exchange Commission (SEC) said internet-based companies may have the same incentives to offer equity compensation to gig-workers since they do to workers. Until now, though, SEC rules haven’t allowed companies to cover gig workers in equity.
The proposal wouldn’t need an increase in pay, simply create flexibility to whether to pay using money or equity. It comes amid a fierce debate within the fast-growing gig market, which labour activists complain pops workers, depriving them of job security and traditional benefits like healthcare and paid holidays. The SEC’s Democratic commissioners said giving technology giants such versatility could create an uneven playing field for other kinds of companies.
“Work relationships have evolved along with technology, and workers who participate in the gig economy have become increasingly important to the continued growth of the broader US economy,” said SEC Chairman Jay Clayton in a statement.
The proposed temporary rules will enable gig workers to participate in the rise of the firms their attempts support, he added, capped at 15% of annual compensation or $75,000 in 3 years.
Democratic Party SEC commissioners Allison Lee and Caroline Crenshaw opposed the move, stating alternative work structures, such as independent contractors and freelancers, have existed for decades over a range of industries and it wasn’t clear why technology businesses should be singled out for special treatment.
“Whatever the potential merits of equity compensation for alternative workers, the proposal does not establish a basis for selectively conferring a benefit on this particular business model,” they wrote in a statement.
The team at Platform Executive hope you have enjoyed this news article. Initial reporting via our official content partners at Thomson Reuters. Reporting by Michelle Price. Editing by David Gregorio.
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