SEC Plan Would Let Gig Workers Get Up To 15 Pct In Compensation Via Stock

Food delivery workers, among others who work in the gig economy, would be able to get as much as 15 percent of their compensation in stock with a proposal made public by the U.S. Securities and Exchange Commission (SEC) Tuesday (Nov. 24), Bloomberg reported.

In addition, the agency’s concept would change securities regulations to make it simpler for companies that operate mobile programs to provide stock to those workers. A number of those workers are not classified as employees; rather, they are rather categorized as independent contractors.

“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 U.S. economy,” SEC Chairman Jay Clayton said in a statement. “The rules we are proposing today are intended to allow platform workers to participate at a measured level — up to 15% of their compensation — in the growth of the companies that their efforts support.”

The public will be able to provide its input on the agency’s proposal for 60 days.

The news comes as voters in California gave the nod to the Proposition 22 on Nov. 3. That ballot initiative lets app-based firms like ridesharing companies and other gig economy firms categorize workers as contractors instead of employees.

The nod means that DoorDash, Uber and Lyft can breathe a bit easier and will not have to drastically change their business models, as they said the would need to do if Prop 22 had been voted down.

It also means that Assembly Bill 5 (AB5), which was ratified in 2019, is, in essence, dead in the water. The state labor regulation would have mandated that drivers for ridesharing firms work a minimum of 15 hours a week to be categorized as employees.

Logan Green, co-founder and CEO of Lyft, referred to the ballot measure on a recent earnings call as a “landmark achievement for our industry that will make ridesharing even better for drivers and riders.”

“We believe the outcome in California is a win-win-win,” Green noted that the time, saying that the measure is good for drivers, passengers and the state’s economic recovery.