Treating freelancers as employees is a bad move says MEI

Study warns that following the Californian example won’t help low-income workers

Treating freelancers as employees is a bad move says MEI

If Canada were to adopt a model trialled in California, it would not help low-income workers and is likely to damage the strength of the employment market.

A new study from the Montreal Economic Institute warns that tightening regulations to force companies to treat freelancers as employees would risk a part of Canada’s employment landscape that often gives workers an entry point.

With around 60,000 Canadian jobs created by the sharing economy each year, the MEI report says that for many people this is a first rung on the employment ladder.

"The dramatic creation of new part-time jobs thanks to the internet and cellphone apps has expanded the range of services people are willing to hire for, and made it much easier both to work and to hire people for casual work," points out Peter St. Onge, Senior Economist at the MEI and author of the publication.

If regulators were to change the law, it could have serious negative impact.

"The goal of a California law that took effect last September was to improve conditions for gig workers. In practice, it has led to mass layoffs of freelance workers in the media and the film industry," explains Peter St. Onge. "Despite good intentions, forcing employers to provide benefits to contract workers risks making matters a lot worse."

Onge added that the have been studies that show that the best way to get a job is to be working, even if that is in the ‘gig economy’.

"Instead of making it harder to hire freelancers and part-time workers, governments should be making it easier. The freedom to contract and to work as one pleases is not only a fundamental right, it is among the most effective ways to help marginal workers who need that first rung on the ladder," concludes Peter St. Onge.