The Securities and Exchange Commission (SEC) recently released rules that would allow public and private companies to offer equity compensation to workers in concert.
The proposed pilot program would allow tech companies like Uber and Lyft to pay workers together up to 15% of their annual compensation in equity rather than cash. Until now, SEC rules have not allowed companies to pay gig workers in equity, Reuters reported.
“As our economy and our way of working change, we must be prepared to experience concomitant changes in our regulations,” Commissioners Elad Roisman and Hester Peirce wrote in a statement. declaration.
“Under the proposed guidelines, concert workers who provide services through a market are eligible for stock-based compensation, not consumers of those services. The commission is examining whether workers who sell goods could also participate in the stock-based compensation program ”, TechCrunch reported,
“The concert economy is here to stay. We are proposing to amend a separate area of our securities laws to allow the many Americans who engage in pay-as-you-go work, as it provides a much needed current source of income, also to create long-term investments, ” wrote the commissioners in their statement.
“As our country’s economy recovers from the pandemic, many underemployed or unemployed people will be drawn to the flexibility and income opportunities that working from home can offer. We see today’s proposal as a way to improve the benefits of these important workers and to show them the powerful role that our financial markets can play in building a nest egg for retirement and for transmission to next generation.
While the proposal would not require a salary increase, it does create flexibility over payment in cash or equity. It comes amid a heated debate over the rapidly growing gig economy, which union activists say workers are exploited, deprived of job security and traditional benefits like healthcare and paid vacation. .
Some on Twitter applauded the decision.
Jason Calacanis, a serial entrepreneur, angel investor and podcaster, tweeted: “Thanks to @SEC_News for supporting upward mobility in America. Imagine if every 50 or 100 trips you got a bonus share of $ uber-back in 2010 when the angels invested! The drivers would be RICH! “
Another person tweeted: “This is great news. Equity is the answer “
But others have criticized the timing of the SEC’s proposal. One person tweeted: “The drivers would be RICH! With the exception of the $ 200 million deployed by VCs and greedy-obsessed shareholders for the passage of Prop 22, which gave the drivers a net pay of $ 5.64 an hour. “
The news follows a recent decision by California voters to support an initiative that overturned legislation that would have classified concert workers as employees. Voters have sided with Uber and Lyft, voting to adopt Proposition 22, which classifies concert drivers as independent contractors, not employees.
The move hurt Black Uber and Lyft workers.
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In San Francisco, 78% of drivers using apps are black and people of color, and 56% are immigrants, according to a UC Santa Cruz study. More than half of these app users work more than 40 hours per week. Despite this, 15% still have to rely on public assistance to get by.
“Too often, these apps fuel the false promise of a stable life for immigrants and people of color. This is what driver activists like to call ‘exploit by innovation’, “Erica Smiley wrote in an opinion piece for Guardian.