PETALING JAYA: An independent researcher has called on the government to introduce wider protection for gig workers, particularly in the form of a minimum pay, amid the challenging domestic and global economic climate.
“I think, as a society, we have to agree in principle to ensure fair pay for all workers in Malaysia, regardless of their jobs, contracts, and hours,” said Edwin Goh, a researcher formerly with the think tank The Centre.
“The rationale behind what is a fair minimum wage for them can be based on formulas and consultations focusing on the nature of the job, working patterns, business viability, and other important factors,” he told FMT Business.
On June 11, New York City announced new regulations that set the minimum wage for delivery workers at US$17.96 (RM80.41) per hour beginning July 12. The rate will be increased to US$19.96 (RM89.36) in April 2025.
This is the first minimum pay rate in the US.
In Malaysia, there is no official data to track the income distribution of gig workers given the complexity of capturing such figures.
“Most media reports indicate that full time delivery gig workers are likely to earn around RM2,000 to over RM3,000 (per month),” Goh said.
“Noticeably, there are outliers who sometimes earn more than RM4,000 (per month) by working long hours, which raises alarming concerns for their wellbeing.”
Minimum wage not enough
While noting that minimum wage initiatives for gig workers are important, Goh pointed out that other forms of protection are also needed to safeguard their wellbeing.
He cited as an example Seattle’s enactment of a law on March 30, which permanently grants most gig workers paid sick leave. The law is the first of its kind in the US.
Another example he mentioned was the draft rules proposed by EU countries on June 12 to grant employee benefits to gig workers.
According to the EU, the draft rules would cover some 4.1 million of the 28 million workers at online platform companies across the 27 country regional bloc.
World Bank economist Alyssa Farha Jasmin pointed out that delivery riders face high occupational risks, yet they lack access to social safety nets such as retirement savings and employment accident insurance.
She proposed two initiatives the government can take to improve protection for gig workers.
First, the government could mandate automatic contributions for retirement savings on incomes earned through digital platforms.
One example is the collaboration between the Employees Provident Fund (EPF) and GoGet, which involves the introduction of a “contribute as you earn” model.
It gives workers on GoGet the option of contributing to their EPF account a share of their earnings from every job through automatic deductions.
“This model can be considered for other digital platforms as well,” Alyssa said.
Second, she proposed for the government to mandate accident insurance provision by digital platforms for high risk tasks such as those performed by drivers and p hailing riders.
“This initiative was announced in the 2023 Budget, and it would be important to follow through with it,” she said.
Regulation not easy
Alyssa, however, pointed out that regulating gig work is a challenging task as it seeks to simultaneously balance the wellbeing of workers while enabling them to take advantage of the flexibility of gig work.
“All over the world, countries are grappling with appropriately classifying and subsequently protecting workers in the gig economy, with a particular spotlight on e-hailing drivers,” she said.
“In the UK for example, Uber drivers are now considered employees, meaning they receive benefits such as paid annual leave, sick leave, minimum wage (for time spent working with the Uber app active, including waiting time) and retirement scheme contributions.
“In Belgium, however, a similar petition by Deliveroo food delivery riders was rejected by the court.”
In the Malaysian context, Alyssa said, the amendments to the Employment Act in March 2022 contained provisions that may potentially affect informally employed workers, including gig workers.
The amendments saw the inclusion of Section 101c, which broadly defines who an employee is in cases where there are no written contracts of service. However, such definitions are made only on a case-by-case basis.
“Section 101c may be applied on a case by case basis in the event of a dispute between a gig worker and the party through which they are generating an income.
“It is potentially a significant amendment, but its full impact is yet to be seen,” Alyssa said.
On June 10, Prime Minister Anwar Ibrahim announced that the government would establish the Gig Economy Commission Malaysia (Segim) to regulate the gig industry.
The commission, he said, would take care of the welfare of the entire economic chain, including service providers, suppliers, workers and consumers.
He also said that as many as 1.12 million people are involved in the gig industry and the number is increasing by 23% every year.
Source: https://www.freemalaysiatoday.com/category/highlight/2023/07/26/gig-workers-need-minimum-wage-other-protections-too/