By Farahdiba Abdullah
The rapid development of the global Gig Economy which contributed to significant economic growth is slowly taking over traditional occupations, as well as the labor market. According to the U.S. Government Accountability Office (2015) report, 40% of the workers now have non-traditional jobs with app-based companies (Uber, Lyft, Grab, etc.). Similarly, based on the data by World Bank, more than half of the global percentage indicated that Malaysia’s participation in the Gig Economy is expected to rise rapidly in the coming years. The Employees’ Provident Fund (EPF) also stated that the Malaysian freelancing economy has grown by 30%. This makes Malaysia the third-largest freelancing market in the region according Freelancer.com.
According to an article by Jobstreet.com, the Gig Economy consists of groups of part-timers working on a contractual or ad-hoc basis, who are not eligible for the same benefits as traditional workers. However, when many people treat it as a full-time job, problems arise. Gig workers feel that they are treated unfairly when there are no benefits provided. The lack of EPF, insurance coverage, financial security are huge issues for them. Due to the nature of the job, relationships between employers and workers are important in resolving various issues with or without government intervention.
In the past few months, the Prime Minister, Tun Dr. Mahathir Muhammad considered regulating new laws to protect the workers by looking into three main components; the requirements for basic salary, EPF and SOCSO. The real implementation is still questionable and many app-based companies are claiming that they control the market and created a disruptive innovation via customer-centric platforms. In this regard, the government needs to clarify and where possible extend those protections as well as enforce them more consistently on behalf of all vulnerable workers. Based on the Economic and Labor Relations Review (2017), there are five broad options for the cabinets to implement. These are:
In conclusion, policy-makers, regulators and researchers should be optimistic and open-minded in pursuing any potential avenue for expanding the existing regulatory protections for gig workers. Without adjusting and strengthening labor regulations and safety nets to reflect better work conditions of Malaysia’s Gig Economy, it could be more challenging for the government to maintain it as a key source of economic growth.