(Reuters) — The U.S. securities regulator on Tuesday proposed a pilot system to enable tech corporations like Uber and Lyft to spend gig workers up to 15% of their annual compensation in equity rather than money, a move it mentioned was created to reflect alterations in the workforce.
The Securities and Exchange Commission (SEC) mentioned online-primarily based corporations may possibly have the similar incentives to supply equity compensation to gig-workers as they do to staff. Until now, even though, SEC guidelines have not permitted corporations to spend gig workers in equity.
The proposal would not call for an raise in spend, just generate flexibility on whether or not to spend making use of money or equity. It comes amid a fierce debate more than the quickly-expanding gig economy, which labor activists complain exploits workers, depriving them of job safety and classic advantages like healthcare and paid vacations. The SEC’s Democratic commissioners mentioned providing tech giants such flexibility would generate an uneven playing field for other kinds of corporations.
“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,” mentioned SEC Chairman Jay Clayton in a statement.
The proposed short-term guidelines would enable gig workers to participate in the development of the corporations their efforts assistance, he added, capped at 15% of annual compensation or $75,000 in 3 years.
Democratic SEC commissioners Allison Lee and Caroline Crenshaw opposed the move, saying option operate arrangements, like independent contractors and freelancers, have existed for decades across a variety of industries and it was not clear why tech corporations ought to be singled out for unique therapy.
“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.
(Reporting by Michelle Price Editing by David Gregorio)