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Spain Approves Landmark Law to Protect Food-Delivery Workers

Spain Approves Landmark Law to Protect Food-Delivery Workers

The Spanish Cabinet on Tuesday ratified the so-called “Rider Law”, whereby food-delivery workers from platforms such as Uber Eats, Deliveroo and Glovo will enjoy a new legal status, going from self-employed to salaried workers.

The new law comes after months of tense negotiations led by Labor Minister and Deputy Prime Minister Yolanda Díaz between labour unions, business associations. The aim was to convert into legislation a Supreme Hight Court ruling from September last year in favour of a worker from Glovo, arguing that “the relationship that exists between a rider and the Glovo business is of a professional nature.” 

By hiring riders as self-employed workers, food-delivery platforms saved on social security fees, a responsibility that fell upon workers, who had to pay an average monthly fee of €280 while lacking other benefits of long-term contracts, such as holiday pay or sick leave. According to a study published by the union UGT in 2019, platforms saved 168 million a year thanks to the self-employed model. 

Under the new legislation, digital platforms will also have to reveal how their algorithms affect working conditions. 

Companies have 90 days, until 12 August, to comply with the new legislation. “No other country in the world has dared to pass a law liked this,” Yolanda Díaz said at a press conference on Tuesday. Díaz highlighted that it “protects the most vulnerable because it affects the young people of our country,” and added that “being brave and fearless when it comes to legislating technological change is key.” Díaz praised the work carried out by labour inspectors, which has resulted in 16.794 regularized workers and an economic impact of about €29 million. 

Referring to the ever-growing presence of technology in business and to fears it might harm workers, Díaz also announced the creation of an expert committee to “undertake an in-depth study of the good use of AI and algorithms in labour relations.”

Mixed Reactions

Not all riders are happy with the new law, for different reasons. Thousands of riders across Spain took to the streets to protest because they want to continue being self-employed and enjoy the flexibility this status affords. Moreover, although it is not the norm, many riders can get to make €2,000 or more a month before taxes, and if they become salaried workers, they might see how their income shrinks by 50%. The over-50 fear they will lose their jobs under the new law.

In this spirit, an Uber Eats spokesperson said the regulation will “hurt thousands of riders who use food delivery apps for much-needed flexible earnings opportunities and made it clear they do not want to be classified as employees.”

“The decree approved today by the cabinet is a hard blow for the future of the digital economy in Spain», said Adigital, a business industry association that represents gig economy companies, including Deliveroo and Spanish start-up Glovo. 

 

Being self-employed has traditionally been synonymous with entrepreneurship. But in the past decade, false self-employment has increased greatly, with employers benefiting the most from the scheme

 

The APS Association, with Uber Eats and Stuart among its members, lamented that “the urgent approval of the royal decree without having been debated in Congress jeopardizes the development of a sector that contributes over €700 million to the Spanish GDP,” and decried the fact that it has been passed without consulting “restaurants, platforms and, more surprisingly, riders themselves.”

By contrast, Just Eat, the Spanish branch of Take Away, which started hiring workers in over 160 European cities last year, supports the law, saying it generates “legal certainty” and guarantees the “same rules” for all workers. 

On the other side, for Riders x Derechos (Riders for Rights), the law comes with many flaws because it does not guarantee current workers will keep their jobs. They also point out that platforms will likely outsource hiring and that, overall, it fails to benefit all workers in the gig economy, such as drivers.  

False Self-Employees in Spain

No matter how much money a food-delivery rider makes, as an autónomo, as we call the self-employed in Spain, they must pay a minimum monthly fee of €289. Being self-employed has traditionally been synonymous with entrepreneurship. However, over the past ten years, the figure of the false self-employed worker has become widespread.

False self-employed workers are registered under the Special Regime for the Self-Employed (RETA). They work for a single company, which establishes the working conditions, including the salary and the working hours. They must bill the company, pay the social security fees and other income taxes, such as the VAT. Regardless of whether they make €1,000 a month or to €5,000, the social security payments remain the same. And to make matters worse, these workers are not entitled to unemployment benefits after dismissal. In short, they are salaried workers without the conditions of a regular work contract. A fraud.

A New Plan

But things are about to change. Social Security Minister José announced on Wednesday he had made a proposal to main labor unions UGT and CC OO as well as to employer groups CEOE and Cepyme to establish a new multi-tiered system of contributions based on annual revenue.

The new system would include 13 contribution brackets based on estimated revenue, with a minimum fee of €90 up to a maximum of €1,220. If actual income falls below or above their chosen contribution, they can alter it six times a year to make it fit. Come the end of the year, additional payments can be made, or refunds requested.

Self-employment unions have expressed anger at the new proposal. “Tomorrow the CEOE Social Security commission will meet, and there is no way we will agree with this draft that the Government has sent,” Lorenzo Amor, the president of the National Federation of Self-Employment (ATA) said to Europa Press. According to data provided by El País, a low earner making €3,000 a year would have to pay €90, that is, €1,080 over the same period. But that is only after the first year, during which the fee is established at €200. “Someone making between 3,000 to 6,000 a year would have to pay €2,580 to social security. We’re not going to allow that. It’s outrageous,” Amor concluded.

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The Spanish Cabinet on Tuesday ratified the so-called “Rider Law”, whereby food-delivery workers from platforms such as Uber Eats, Deliveroo and Glovo will enjoy a new legal status, going from self-employed to salaried workers.

The new law comes after months of tense negotiations led by Labor Minister and Deputy Prime Minister Yolanda Díaz between labour unions, business associations. The aim was to convert into legislation a Supreme Hight Court ruling from September last year in favour of a worker from Glovo, arguing that “the relationship that exists between a rider and the Glovo business is of a professional nature.” 

By hiring riders as self-employed workers, food-delivery platforms saved on social security fees, a responsibility that fell upon workers, who had to pay an average monthly fee of €280 while lacking other benefits of long-term contracts, such as holiday pay or sick leave. According to a study published by the union UGT in 2019, platforms saved 168 million a year thanks to the self-employed model. 

Under the new legislation, digital platforms will also have to reveal how their algorithms affect working conditions. 

Companies have 90 days, until 12 August, to comply with the new legislation. “No other country in the world has dared to pass a law liked this,” Yolanda Díaz said at a press conference on Tuesday. Díaz highlighted that it “protects the most vulnerable because it affects the young people of our country,” and added that “being brave and fearless when it comes to legislating technological change is key.” Díaz praised the work carried out by labour inspectors, which has resulted in 16.794 regularized workers and an economic impact of about €29 million. 

Referring to the ever-growing presence of technology in business and to fears it might harm workers, Díaz also announced the creation of an expert committee to “undertake an in-depth study of the good use of AI and algorithms in labour relations.”

Mixed Reactions

Not all riders are happy with the new law, for different reasons. Thousands of riders across Spain took to the streets to protest because they want to continue being self-employed and enjoy the flexibility this status affords. Moreover, although it is not the norm, many riders can get to make €2,000 or more a month before taxes, and if they become salaried workers, they might see how their income shrinks by 50%. The over-50 fear they will lose their jobs under the new law.

In this spirit, an Uber Eats spokesperson said the regulation will “hurt thousands of riders who use food delivery apps for much-needed flexible earnings opportunities and made it clear they do not want to be classified as employees.”

“The decree approved today by the cabinet is a hard blow for the future of the digital economy in Spain», said Adigital, a business industry association that represents gig economy companies, including Deliveroo and Spanish start-up Glovo. 

 

Being self-employed has traditionally been synonymous with entrepreneurship. But in the past decade, false self-employment has increased greatly, with employers benefiting the most from the scheme

 

The APS Association, with Uber Eats and Stuart among its members, lamented that “the urgent approval of the royal decree without having been debated in Congress jeopardizes the development of a sector that contributes over €700 million to the Spanish GDP,” and decried the fact that it has been passed without consulting “restaurants, platforms and, more surprisingly, riders themselves.”

By contrast, Just Eat, the Spanish branch of Take Away, which started hiring workers in over 160 European cities last year, supports the law, saying it generates “legal certainty” and guarantees the “same rules” for all workers. 

On the other side, for Riders x Derechos (Riders for Rights), the law comes with many flaws because it does not guarantee current workers will keep their jobs. They also point out that platforms will likely outsource hiring and that, overall, it fails to benefit all workers in the gig economy, such as drivers.  

False Self-Employees in Spain

No matter how much money a food-delivery rider makes, as an autónomo, as we call the self-employed in Spain, they must pay a minimum monthly fee of €289. Being self-employed has traditionally been synonymous with entrepreneurship. However, over the past ten years, the figure of the false self-employed worker has become widespread.

False self-employed workers are registered under the Special Regime for the Self-Employed (RETA). They work for a single company, which establishes the working conditions, including the salary and the working hours. They must bill the company, pay the social security fees and other income taxes, such as the VAT. Regardless of whether they make €1,000 a month or to €5,000, the social security payments remain the same. And to make matters worse, these workers are not entitled to unemployment benefits after dismissal. In short, they are salaried workers without the conditions of a regular work contract. A fraud.

A New Plan

But things are about to change. Social Security Minister José announced on Wednesday he had made a proposal to main labor unions UGT and CC OO as well as to employer groups CEOE and Cepyme to establish a new multi-tiered system of contributions based on annual revenue.

The new system would include 13 contribution brackets based on estimated revenue, with a minimum fee of €90 up to a maximum of €1,220. If actual income falls below or above their chosen contribution, they can alter it six times a year to make it fit. Come the end of the year, additional payments can be made, or refunds requested.

Self-employment unions have expressed anger at the new proposal. “Tomorrow the CEOE Social Security commission will meet, and there is no way we will agree with this draft that the Government has sent,” Lorenzo Amor, the president of the National Federation of Self-Employment (ATA) said to Europa Press. According to data provided by El País, a low earner making €3,000 a year would have to pay €90, that is, €1,080 over the same period. But that is only after the first year, during which the fee is established at €200. “Someone making between 3,000 to 6,000 a year would have to pay €2,580 to social security. We’re not going to allow that. It’s outrageous,” Amor concluded.

Dearexpat, is aimed at English-speaking readers who have been living in Spain for long enough to be interested in the country’s current affairs, with a focus on politics, the economy, society, and culture. In fact, anyone, anywhere with a keen interest in Spain might find it helpful. Since we are usually overwhelmed by an endless outpouring of news, this newsletter will be published every Friday to provide readers with an overview of the most noteworthy events taking place during the previous week.

Get up to date with what is going on in Spain in just one go. Sign up to Dearexpat,

Dearexpat, is aimed at English-speaking readers who have been living in Spain for long enough to be interested in the country’s current affairs, with a focus on politics, the economy, society, and culture. In fact, anyone, anywhere with a keen interest in Spain might find it helpful. Since we are usually overwhelmed by an endless outpouring of news, this newsletter will be published every Friday to provide readers with an overview of the most noteworthy events taking place during the previous week.

Get up to date with what is going on in Spain in just one go. Sign up to Dearexpat,