KUALA LUMPUR – Gaps in existing social security schemes, government policies, and regulations have left gig workers exposed to vulnerabilities, according to a study conducted by MyDigital Corporation’s Malaysia Centre for the Fourth Industrial Revolution (Centre4IR).
The centre, which is the Malaysian chapter of the World Economic Forum’s global network, detailed this finding in its white paper outlining the demographics, motivations, earnings, experiences, and views on regulations for 1,500 gig workers in Malaysia.
Unveiled at Centre4IR’s first-anniversary ceremony yesterday, the white paper listed several recommendations for policymakers and platform providers to address issues faced by gig workers here.
One of the issues highlighted is how self-employed individuals feel vulnerable due to “significant gaps” in initiatives and policies.
This is despite the presence of voluntary schemes such as the Employee Provident Fund’s (EPF) i-Saraan program and the Social Security Organisation’s (Socso) Self-Employment Social Security Scheme (SKSPS).
“This ‘missing middle’ phenomenon highlights the ongoing need for further expansion and improvement of social security initiatives to ensure comprehensive protection for all segments of the workforce,” the study showed, following a five-month survey since early this year.
The ‘missing middle’ referenced in the report refers to individuals who earn irregular incomes and lack access to traditional workplace benefits, leaving them without adequate financial protection but not considered “poor enough” to qualify for social assistance programs.
The document also noted that Grab had previously collaborated with EPF to facilitate its e-hailing drivers and p-hailing riders’ access to social protection schemes, with the partnership aimed at increasing awareness of i-Saraan by offering matching contributions for gig workers.
Another company, GoGet, similarly introduced a ‘contribute as you earn’ model allowing its workers to deduct a portion of their earnings from every job for their retirement savings, the study said.
“While regulations are being adapted, gig platforms must make private initiatives to augment social protection for gig workers (to ensure workers) are adequately compensated based on effort and other softer criteria such as time spent.
“For delivery riders, compensation is based primarily on deliveries completed. This imposes inordinate pressure on workers to do as many deliveries as possible to increase income, which heightens the risk of workers flouting traffic rules, risking accidents and injury to speed up deliveries.”
In its recommendation for policymakers, the centre said the government should consider ensuring competitive pay rates under fair and transparent structures while guaranteeing full-time gig workers receive minimum wage protection.
It added that government intervention is needed to establish regulatory frameworks that afford gig workers adequate employment protection and avenues for recourse, noting that the establishment of the Gig Workers Commission presents a potential avenue to address such issues.
A bill on the commission, which seeks to address the increasing participation of young Malaysians in freelance and contract-based employment, is expected to be tabled in the Dewan Rakyat next month.
Besides that, the white paper also noted that while the government has initiated regulatory efforts targeting specific aspects of the gig economy, reflecting their significance to the national economy and workforce, concerns persist among gig workers.
“The Transport Ministry implemented regulations on ride-hailing drivers in October 2019, mandating PSV (Public Service Vehicle) licences, ride-hailing insurance, vehicle inspections, and medical exams.
“Findings from the survey revealed that these regulations have sparked concerns among gig workers, particularly regarding the financial burden of compliance, highlighting their sensitivity to income fluctuations,” the white paper stated.
These concerns, it said, underscore the nuanced challenges faced by gig workers in adapting to regulatory challenges, emphasising the need for a balanced approach that considers their economic realities while ensuring compliance with industry standards.
In 2017, Malaysia became the first country to legalise e-hailing services, with the provision to monitor the service made possible following the passing of the Land Public Transport (Amendment) Bill 2017 and the Commercial Vehicles Licensing Board (Amendment) Bill 2017.
Under the legislation, e-hailing drivers in Peninsular Malaysia are subject to the jurisdiction of the Land Public Transport Commission (now Agency) while the Commercial Vehicles Licensing Board regulates drivers in Sabah and Sarawak. – June 21, 2024