In Japan, 'Gig Workers' to Receive Minimum Wage and Paid Leave Guarantees

Short-term Freelancers Performing Corporate Outsourcing Tasks
Classified as Sole Proprietors, Minimum Wage Not Applied Issue

The Japanese government plans to improve the treatment of 'gig workers' such as Uber Eats delivery personnel by applying minimum wage regulations and recognizing paid leave, according to a report by Nihon Keizai Shimbun (Nikkei) on the 14th.

According to the report, Japan's Ministry of Health, Labour and Welfare is expected to announce new guidelines within this year that classify gig workers as 'workers.' Through this, the government aims to improve the treatment of gig workers who have so far been classified as sole proprietors and thus have not been guaranteed minimum wage or paid leave.

[Image source=AFP Yonhap News]

Gig workers refer to freelancers who perform one-time tasks through internet platforms under outsourcing contracts with companies. This category includes Amazon and Uber Eats delivery personnel, web designers, IT engineers, and simple data entry tasks.

In Japan, the number of gig workers has rapidly increased thanks to advances in digital technology. According to a joint survey by the NIRA Comprehensive Research and Development Organization, a public interest incorporated foundation in Japan, and Professor Toshihiro Okubo of Keio University, it is estimated that about 2.75 million Japanese people have experience with gig work as a side job.

The problem lies in Japan's Labor Standards Act, which defines workers based on employment contracts. Gig workers who provide labor under outsourcing contracts have been excluded from minimum wage application and paid leave entitlements. Although the structure essentially involves work instructions even without a direct employment contract with the company, the fact that gig workers have very little discretion is also an issue.

In response, the Ministry of Health, Labour and Welfare is considering a plan to regard work instructions such as delivery route settings by artificial intelligence (AI) or algorithms as acts of company supervision and control over workers.

Nikkei evaluated, "Although the burden on companies will increase, it is expected to have the effect of raising wages for Japanese workers overall," adding, "If an environment is created where contracts between gig workers and companies can be more easily concluded and more work can be ordered, it will help alleviate companies' labor shortages caused by population decline."

Europe and the United States, where services utilizing gig workers were activated earlier, have established legal protection frameworks for them ahead of Japan. The European Union (EU) established the 'Platform Work Directive (PWD)' in March to improve the rights of workers on online platforms such as ride-hailing and delivery apps. This is the first legal guideline prepared by the EU to improve the working conditions of gig workers. California in the United States also enacted legislation requiring app operators to guarantee gig workers a minimum income and provide certain incentives.