U.S. tech firms can compensate gig-workers with equity under SEC proposal By Reuters

By Michelle Worth

WASHINGTON (Reuters) – The U.S. securities regulator on Tuesday proposed a pilot program to permit tech corporations like Uber (NYSE:) and Lyft (NASDAQ:) to pay gig employees as much as 15% of their annual compensation in fairness reasonably than money, a transfer it stated was designed to mirror modifications within the workforce.

The Securities and Change Fee (SEC) stated internet-based corporations might have the identical incentives to supply fairness compensation to gig-workers as they do to staff. Till now, although, SEC guidelines haven’t allowed corporations to pay gig employees in fairness.

The proposal wouldn’t require a rise in pay, simply create flexibility on whether or not to pay utilizing money or fairness. It comes amid a fierce debate over the fast-growing gig economic system, which labor activists complain exploits employees, depriving them of job safety and conventional advantages like healthcare and paid holidays. The SEC’s Democratic commissioners stated giving tech giants such flexibility would create an uneven taking part in discipline for different forms of corporations.

“Work relationships have developed together with expertise, and employees who take part within the gig economic system have develop into more and more essential to the continued progress of the broader U.S. economic system,” stated SEC Chairman Jay Clayton in an announcement.

The proposed non permanent guidelines would permit gig employees to take part within the progress of the businesses their efforts assist, he added, capped at 15% of annual compensation or $75,000 in three years.

Democratic SEC commissioners Allison Lee and Caroline Crenshaw opposed the transfer, saying different work preparations, together with unbiased contractors and freelancers, have existed for many years throughout a spread of industries and it was not clear why tech corporations needs to be singled out for particular remedy.

“Regardless of the potential deserves of fairness compensation for different employees, the proposal doesn’t set up a foundation for selectively conferring a profit on this specific enterprise mannequin,” they wrote in an announcement.