- Governments in the Caribbean are closely behind the EU, US and UK on laws fighting the misclassification of gig workers as “freelancers” and not employees.
- Fiverr (FVRR) shares continued to fall this week as the reality of a new regulatory environment looms.
- Uber shares continued falling for the same reason as Fiverr.
- Investors are wising up against stocks that may exploit grey areas in the law to create an unfair competitive advantage.
Global governance to ensure that workers across the world do not fall victim to modern slavery is more important now than ever before. The Caribbean is a region particularly vulnerable to exploitation for three reasons. Firstly, it has a young, vibrant workforce with a good command of the English language, secondly, it is heavily dependent on tourism, which was hit by the global pandemic. Thirdly, it’s workers lack access to other nearby economic zones like the US and Canada. But who would come to exploit our workers today? The answer to the question lies in the digital cloud above us, as we will explain.
Worker misclassification conveniently distorts the facts but this is about to change:
Today, in the cloud infrastructure above us, are technology platforms that sell the fruit of our labour as if it was a shopping cart full of replaceable items, evading employer responsibility and claiming tyranny whenever a government opposes them for the sake of employment rights.
As Human Rights Watch points out: we still think of slavery in terms of emancipation day that occured between 1834 and 1838. But today, governments in Europe, UK and the US have become very familiar with the misclassification of workers as “freelancers”, “self-employed” or “independent contractors”. Recently in the US, the new Biden labour secretary, Marty Walsh aligned their stance with Europe when he said gig workers should be classified as employees instead of independent contractors “in a lot of cases.” Shortly after that, labor leaders announced they specifically want Secretary Walsh to step up his efforts and potentially sue these companies under existing federal law. Naturally this has sent stock prices falling for all gig economy operators in the US, but this still did not solve the issue workers in the Caribbean and elsewhere face.
Governments standing up against labor abuse and misclassification:
The European Commission president Ursula von der Leyen had it listed in her Agenda for Europe. She said that “digital transformation brings fast change that affects our labour markets.” The most crucial comment was when she expressed the need to “look at ways of improving the labour conditions of platform workers.” The UK, for it’s part, had a supreme court case where it was decided that Uber cannot classify workers as self-employed, but rather, due to the level of control it has over the workers – these people are employees which need basic rights such as holiday pay and at least a minimum wage.
Legislators in the Caribbean are making progress too
Already at the 10th ILO Meeting of Caribbean Ministers of Labour which was held in February in Kingston, Jamaica, the intention was made clear to “Plugging regulatory gaps – including policies that ensure equal treatment among workers regardless of their contractual arrangement; policies establishing minimum guaranteed hours and limiting the variability of working schedules; legislation and enforcement to address employment misclassification; restricting some uses of non-standard employment to address abuse, and assigning obligations and responsibilities in employment arrangements that involve multiple parties.”
Exploitation – the extent of the problem with gig platforms:
Simply put, the pay, rights and conditions in the gig economy exploit a huge gap in our outdated employment laws – and this is what these companies use to gain a competitive advantage. Workers with all types of skill levels ranging from graphic design to writing & translation, web design, teaching, videography, data processing, accounting and virtual assistance are being lured to platforms like Fiverr where they can easily fall victim to a toxic cocktail of abuses. This range from being put on strict completion clocks that customers can exploit if they want to scam the worker and leave them out of pocket for “late delivery”, to seriously unfair terms, where clients change the specifications at lastminute, or request additional work without compensation.
Even more alarming, is a case pointed out by a British Fiverr worker called a “freelancer”, where he observed the platform executing a chargeback against him after a client left him a 5 star review, then removing his gigs when he spoke about the problem – and then banning his account after he confronted the company for not giving his money back when he learned the funds were sent from the clients’ bank account but the Fiverr platform claimed that he was “not covered by their compensation”. The fact that a worker is never certain if he or she will get paid, that they get penalized for not responding quick enough over weekends, that they are told their rankings will go down if they dare cancel a bad customer: all of these things point towards abuse, control and an unethical adventure seeking to live in grey areas of the law, or exploit countries where the law has not yet developed.
When we consider the case of Uber and Lyft: They will not bring “new business” to the Carribean. By contrast, they would have simply preferred to bypass all the important employee benefits taxi drivers can have through the current institutions. But when drivers fall ill at Uber or admin workers become sick with Fiverr, these companies will not pay them any benefits – the job will just go to the next person in line. The Caribbean may have been more fortunate in the sense that it has not yet faced human rights abuses affecting children. An issue surfaced on alleged child labour in India, as people were alarmed by a petition on Change.org which addressed Fiverr CEO Micha Kaufman. This attracted thousands of signatories.
Financial Markets Responding – Overvalued Stocks Falling:
Responding as expected to the risk the company faces from appropriate classification of workers, Fiverr International Ltd (NYSE: FVRR) continued to correct. It was already noted by SeekingAlpha that the Fiverr share price may be extremely overvalued. The company failed to issue a warning to investors in relation to new legal risks and did not include this risk in SEC filings. It is argued, in the wake of a recent UK supreme court ruling against Uber, that Fiverr exerts just as much or perhaps more control over the activities, time, payment than Uber. The risk is real that governments may eventually demand backpay for those who were affected.
It is time that the Caribbean stand up against modern slavery and the exploitation of it’s workers. A new global framework is about to transform the gig economy and hold it to account for its obligation to workers. Legislators are not preoccupied with saving the share prices of Fiverr, Uber, Lyft, DoorDash, PeoplePerhour and so forth: they are on a mission to rectify a serious injustice.
Technology transport companies will not bring tourism to the nations in the Caribbean. Instead, they seek to take a portion of revenue from our existing activities here. In the case of admin and graphic design jobs: these freelancing gig platforms will not pay a worker a penny holiday pay, sick leave or a pension. Let’s awaken to this new reality of modern slavery in the cloud and unite with countries that seek to act prudently for the better of all workers.