Platform workers and social security: Recent developments in the Americas
17/10/2023 08:00 AM
A sizeable portion of the work force in the Americas engages in the platform economy, whether as a main or supplementary source of income. This article presents reforms and developments in the region that already have had, or that may have, an impact on the employment status and social protection of platform workers.
Low entry barriers and flexibility offered by the platforms (Datta et al., 2023) provide an alternative to traditional forms of employment but also open the door for irregular and precarious working conditions, including a lack of social security. Recent initiatives in several countries in the region aim to address the regulatory gaps, and hold promise for enhancing protection for platform workers and realizing their fundamental right to social security.
Digital labour platforms, following the International Labour Organization (ILO) definition (ILO, 2021), can be further subdivided into online-based and location-based, or in-situ, each covering a wide range of activities. The triangular relationship ¬¬between worker, client and platform (as intermediator) inherent in platform work presents a challenge to existing labour and social security legislation and calls into question the rights and obligations of both platforms and workers. One result of this is the common classification of platform workers as self-employed workers, leading to limited or no access to labour protection and social security benefits (OECD/ILO/European Union, 2023). The sector’s heterogeneity increases the complexity of legislative procedures aiming to regulate it. Nonetheless, the fast-growing pace of the platform economy and its blurring effect on traditional labour relations highlight the need for countries to adapt and update their legal frameworks (ibid.).
Following the framework put forward by the International Social Security Association (ISSA, 2023) on international developments for the protection of platform workers, this article presents recent developments in the Americas. It explores reforms already in place, ongoing reform processes where a legislative proposal has been submitted to relevant authorities, and active dialogue that indicates an intention to regulate the sector. Additionally, it considers cases which existing social security systems explicitly cover platform workers. Given the rapid growth of the platform economy, the evolving status of legislative developments is noted where possible.
In March 2022, Chile’s Congress adopted Law 21.431a, Chapter X of which adds “Work through Digital Labour Platforms” to the Special Contracts section of the Labour Code. The change classified those providing on-demand, in-situ services as dependent or independent workers, according to the criteria set by article 7 of the same code and outlined the platforms’ duties and contract requirements for both categories of workers.
The law specifies that contracts must include calculation methods, form, and periodicity of payment for wages. Hourly remuneration for active work must be at least 120 per cent of the proportional minimum wage (100 per cent for active work and 20 per cent to account for standby time), while passive work is not remunerated. By considering working time as a combination of passive and active work, it sets limits for dependent workers (as per the Labour Code) while still protecting the freedom to choose work hours. For independent workers, the law provides for a disconnection time of 12 continuous hours within a 24-hour period. Additionally, platforms must provide training on health and safety, safety equipment for bikes or motorbikes, and damage insurance covering work equipment. Finally, independent workers enrolled with a platform for six months or more are entitled to a 30-day termination notice and have access to their data in a structured, generic and easily compatible format.
The law provides dependent workers with mandatory work injury insurance, while independent workers are covered voluntarily. It also extends the right to social security benefits under Decree Law no. 3.500 to independent workers. Moreover, it eases administrative tax compliance responsibilities for independent workers by requiring platforms to verify documentation, function as a withholding agent of applicable taxes, and make data available to regulatory bodies for adequate monitoring. In line with the reform, administrative organizations responsible for work injury insurance must now develop awareness and information activities to inform platforms of their obligations in matters of health and safety, share information of the benefits for independent workers, and develop and monitor workers’ participation in courses on accident prevention.
The federal nature of the United States has allowed different approaches to the rights and needs of platform workers at the city and state level.
In March 2022, House Bill 2076 in the state of Washington set out new rights for platform workers providing passenger services via Transportation Network Companies (TNCs). The bill maintains drivers’ status as self-employed while granting them minimum per-mile and per-minute rates and paid sick leave rights (one hour of paid sick time per 40 hours worked, calculated at their hourly average rate), and limiting working time to 14 consecutive hours within a 24-hour period. Furthermore, it extends the definitions of employer and worker to cover TNCs and drivers under workers’ compensation regulations, whereby regulators will assess premiums based on active hours and rates established for taxi companies. Finally, it establishes a process for drivers to appeal deactivations.
In the same state, the city of Seattle is developing a “Pay Up” policy package (Seattle City Council), a comprehensive set of regulations to create basic protections for on-demand work. The first regulation, Council Bill 120294, signed into law in June 2022 and set to enter into force in January 2024, guarantees a minimum wage that accounts for expenses and excludes tips, and requires pay and job detail transparency. It also requires platforms to disclose records to regulators for efficient monitoring. Without addressing employment classification, the bill maintains and protects work flexibility in terms of the right to freely choose jobs and working hours and prohibits adverse actions on behalf of the platform for limiting hours. Protections against account deactivation are under discussion as a second regulation in the policy package.
In June 2021, the state of Oregon signed House Bill 2393 (effective since 1 January 2022), addressing the safety of platform drivers. HB 2393 requires TNCs to provide motor vehicle liability insurance with personal injury protections to each driver. Under regulation ORS 742.524, benefits include a flexible claim period and payment of expenses (medical coverage of at least 15,000 United States dollars (USD) per person, for at least two years after the accident) and wage protection (drivers can claim up to 3,000 USD per month for 52 weeks of lost income from one to six years after the accident). Affected passengers or pedestrians are also covered.
In April 2022, the province of Ontario’s legislative assembly introduced the Digital Platform Workers’ Rights Act (DPWRA) (Schedule 1 of Bill 88), establishing foundational rights and protections for workers in rideshare, delivery, courier, and other prescribed services offered through digital platforms. After a public consultation period (Ontario’s Regulatory Registry, 2023), the DPWRA and corresponding regulations are expected to come into force in September 2023 and are intended to apply retroactively.
The Act does not amend employment classification relying on the term “workers” but sets a normative framework extending labour protection benefits. Digital platform workers will receive at least the general minimum wage for their active time worked on a recurring payday, and tips and gratuities will not be withheld or subject to deductions. Additionally, it outlines dispute resolution channels (to be addressed within the province) and prohibits digital platforms from denying workers platform access without written explanation or two weeks' notice of removal if the expected duration of the suspension would exceed 24 hours. Finally, it grants workers the right to information on pay calculations and factors that determine work assignments, including rating systems. Without calling for a registry, the act requires platforms to keep workers' information readily available for inspection.
Although it is signed into law, the DPWRA is not yet in force as it still requires regulations. The provincial government opened a consultation period in April 2023 encouraging regulated entities and the public to participate in their development (Ontario’s Regulatory Registry, 2023). The DPWRA and corresponding regulations are expected to come into force in September 2023 and are intended to apply retroactively.
In January 2023 a bill regularizing platform was approved for a second debate by the National Assembly of Ecuador’s Commission of Workers’ Rights and Social Security (Comisión del Derecho al Trabajo y Seguridad Social).
The draft law sets obligations for platforms and workers, and includes reforms to the Labour and Commerce Codes. Notably, it would change article 1 of the Labour Code, expanding its scope of application to include workers offering services in delivery or distribution of products using digital platforms. It also incorporates transparency provisions requiring employers to inform workers of the parameters on which algorithms or artificial intelligence systems affecting decision making (working conditions, access to and maintenance of employment, creation of profiles) are based.
The reform focuses on labour protection, regulating working time via a disconnection feature for a daily rest of 12 continuous hours, and prohibiting using this feature as a sanction measure. Additionally, it would grant workers the right to freedom of association, provide a channel for dispute resolution, and guarantee them access to ratings information. It would also require platforms to provide workers with the necessary protective equipment. Finally, platforms would have to maintain and provide up-to-date data on workers, users, and affiliated businesses for regulators.
In June 2023 the Commission of Labour and Social Security (Comisión de Trabajo y Seguridad Social) in Peru approved a bill to recognize the labour rights of platform workers in the on‑demand sector of delivery, courier, and transport services.
The bill classifies workers as dependent or independent based on the level of subordination and time spent working through the platform. Those who work at least four hours a day (or 20 hours a week) would be classified as dependent and must be provided with a contract that complies with minimum wage and working time regulations for employees and granted all rights under Legislative Decree 728 (unemployment insurance, annual bonus, overtime compensation, paid leave). Independent workers would be placed under a special regulatory framework with a contract showing transparency on potential income. Finally, platforms would be required to establish dispute resolution channels and a designated office in each city of operation.
Digital platforms would also be required to provide safety equipment, accident, disability, and survivors’ insurance to both type of workers. In addition, platforms would have to register dependent workers to the national health insurance scheme and the old age insurance scheme of their choice and verify that independent workers possess a valid health insurance and are affiliated to a public or private pension scheme. To facilitate monitoring by labour authorities, platforms would be required to maintain a registry of all of affiliated workers.
Developments in Argentina remain at initial proposal stage, since 2019 multiple initiatives addressing the needs of platform workers have been brought forward by the Legislature and the Executive. Prominent among these is the (draft) “Statute for the On Demand Digital Platform Worker” (Estatuto del Trabajador de Plataformas Digitales Bajo Demanda) (Ministry of Labour and Social Security, 2020), which would regulate employment relationships outside the existing regimes for self-employed and employees. The framework outlines pay, working time, and transparency regulations while also contemplating accident insurance, dismissal settlements and a sickness fund. Furthermore, the benefits would be determined by labour law at a rate based on special regime, with platforms responsible for declaring income and making contributions. Proposals in the Chamber of Deputies and Senate address the same aspects, albeit with slightly varied or additional provisions, including the creation of a national registry of platform workers and the inclusion of exclusivity clauses.
Costa Rica's Executive Branch presented a proposal in May 2023 to equate taxi services facilitated through digital platforms with the regular system. It would maintain workers’ status as self-employed, classifying them as Platform Affiliated Drivers (Conductor Afiliado a Plataforma – CAP), requiring registry and accreditation, and would ensure a minimum profitability per kilometre. Additionally, it would require CAPs to enrol in social security with the Social Security Fund of Costa Rica (Caja Costarricense de Seguro Social – CCSS) under a specially designed contribution scheme and present this information to platforms upon registration. CAPs would also be required to have third-party liability and work injury insurance. Finally, it would ease tax collection and compliance by making platforms act as value added tax (VAT) withholding agents and implementing a shared database where platforms show how workers meet mandated obligations.
Illustrative image (internet)
In Uruguay, the Ministry of Labour and Social Security (Ministerio de Trabajo y Seguridad Social) presented a bill in September 2022 to establish base-level protections for digital platform workers. The proposal affects workers of on-demand services of delivery and transportation of passengers regardless of their status as employees or self-employed, where such classification falls back on the platform. It calls for transparency in algorithm and monitoring systems, focusing on automated decision-making features, grants workers the right to contest significant changes in working conditions, and requires platforms to implement preventive measures based on assessed risks. Employees would have a working time limit of 48 hours per week (active and passive time) for the same platform, as well as hourly or task-based remuneration in line with minimum wage requirements. Notably, platforms would be required to pay contributions on behalf of self-employed platform workers for work injury and occupational disease insurance, and self-employed workers could voluntarily register in the Monotributo Scheme to receive additional social security benefits.
In some countries, government bodies have opened debates, sometimes through social dialogue, on platform workers’ rights.
Potential legislative changes are developing through social dialogue. While the current system allows self-employed workers to register for social security as microentrepreneurs, only 23 per cent of delivery workers contribute to social security (IPEA, 2023). The Executive has expressed a commitment to decent work, and, through Decree 11.513/2023, created a Tripartite Working Group tasked with developing a proposal to regulate service provision activities, transportation of goods, transportation of people, and other activities performed through digital platforms. Three subgroups focus on: delivery drivers, passenger transport, and broader issues such as balancing profit and worker dignity. Remuneration and occupational safety and health are also under discussion in the delivery driver subgroup (Agencia Brasil, 2023).
In the province of British Columbia, Canada, the Government is collaborating with app-based ride‑hail and delivery workers, platform companies and other parties to set standards and protections. The process, initiated by the Ministry of Labour in the latter part of 2022, led to a discussion paper released in August 2023 titled “Proposing Employment Standards and Other Protections for App-Based Ride-Hail and Food-Delivery Workers in British Columbia”. The paper identifies four priority issues: fair compensation, pay and destination transparency, account suspensions, and workers’ compensation and OSH coverage (govTogetherBC, n.d.). A second round of engagement calls for feedback on questions set by the paper by the end of September 2023.
Earlier this year the Ministry of Labour (Ministerio del Trabajo) in Colombia presented an extensive Labour Code reform to Congress that would have regulated delivery work through online platforms. Intended changes included granting workers all rights and benefits currently in place for dependent workers while under a special contract, algorithm transparency in automated decision‑making, and the development of a registry of all platform delivery workers. The reform was archived due to insufficient quorum for debate (eight out of 21 commission members), preventing its discussion before the end of the legislative session. However, the Ministry is expected to present a new project for the upcoming session.
In Mexico, there are currently 21 law proposals that would affect platform workers (Reporte Indigo, 2023). Among the proposed changes are: extending the application of Labour Law to platform workers; regulating work contracts; ensuring transparency in wage calculations; guaranteeing a minimum wage; and requiring registration for the mandatory social security scheme. Although none has been approved, these projects have opened a space for dialogue, such as the Forum for Digital Platforms and the Social Security of the Future (Plataformas digitales y Seguridad Social del futuro – PlaDiSS) (UNAM, 2022). Additionally, the Secretariat of Labour and Social Protection (Secretaría del Trabajo y Previsión Social) is developing regulations for the sector.
At the federal level, the U.S. Department of Labor published a Notice of Proposed Rulemaking related to the classification of employment. The proposed rule sets a framework to aid employers in determining employment status under the Fair Labour Standards Act (FLSA). Specifically, it would reinstate the multifactor economic reality test and rescind the 2021 Independent Contractor Rule, as the Department does not consider the current rule to be fully aligned with the FLSA. The reinstation of the economic reality test addresses the notion of “whether a worker is economically dependent on the employer for work or in business for themselves” (Wage and Hour Division, 2022). The rule would not automatically grant employee status to platform workers but provide them with a stronger argument for employee classification. Being classified as an employee would afford them the protections enforced by the Department of Labor, such as federal minimum wage, overtime pay, protection against discrimination and unemployment insurance.
Notably, in some countries, even within the existing legislative framework, platform workers can currently access social security benefits through key programmes or strategies developed by the regulatory bodies that explicitly target their sector of the economy.
Currently, platform workers in Argentina can register and make contributions to a monotax scheme (“Monotributo”) as self-employed workers. The Monotributo is an integrated scheme with a single fixed rate covering both income tax and social security contributions. The Monotributo serves to formalize workers as well as provide them with social security benefits, including health care coverage of dependants. Platforms, in turn, enforces formalization by requiring workers to provide tax documentation.
In 2017, the Social Insurance Bank (Banco de Previsión Social – BPS) in Uruguay developed a strategy to formalize workers in the sharing economy through a multi-pronged process that included legislative changes with tax regulations for passenger transport services. The regulations require drivers to have permits and purchase third-party liability insurance, stipulate working time regulations, and comply with the tax and social insurance regulations applicable to their economic activity, similar to Uruguay’s own Monotributo scheme. The process relied on inter-institutional coordination between public institutions and private companies that enables the use of the platforms’ advanced technologies to control and inspect processes, preventing evasion of taxes and social security contributions. With the agreement reached with the companies, drivers cannot engage in this activity on a regular basis if they are not registered with the tax authorities and BPS.
Platform workers in Mexico are currently classified as self-employed and eligible for social security benefits through a pilot programme managed by the Mexican Social Security Institute (Instituto Mexicano del Seguro Social – IMSS). The pilot allows voluntary incorporation into the mandatory scheme. Through an agreement between IMSS and platforms Uber, Beat, Didi, and Rappi, the platforms use information campaigns to promote registration to the scheme at a daily contribution rate of 40 Mexican pesos (MXN), emphasizing access to six social insurance benefits (sickness, maternity, work injury, disability, old age, family benefits). The scheme also covers dependent family members (IMSS, 2021).
Final remarks
Initiatives to regulate the platform economy in the Americas align closely with global trends. The lack of a legal framework to extend labour protections and social security to these workers has resulted in limited protection that new developments seek to resolve.
Given the complexity of the platform economy, there is no standard trend in the approaches taken, which range from labour code reforms, to separate social security schemes, or regulations targeting one particular need or gap. Furthermore, there is no unified stance on employment classification, and indeed the status of platform workers varies by jurisdiction, sometimes even within the same country.
Continued monitoring of developments shows the wide variety of priorities within platform work legislation. Almost all cases presented deal exclusively with location-based, as opposed to online, platform work, often even referring to specific subgroups such as delivery or taxi services. Similarly, no matter the employment classification, adequate pay, occupational safety and health, and data transparency are the most regulated aspects.
Finally, it is important to highlight the cases where, in lieu of platform work regulations, the social security systems have adapted to provide some level of benefits to workers, typically facilitating their enrolment into existing schemes for the self-employed. In each of these cases, collaboration between public institutions and platforms has played a key role both in the formalization of workers and the provision of benefits.
ISSA
Sickness
Work Injury and Occupational Disease
Survivor’s
Old-age
Maternity
Unemployment
Medical (Health Insurance)
Certificate of coverage
VSS - ISSA Guidelines on Social Security
