US tech firms can compensate gig-workers with equity under SEC proposal

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The U.S. securities regulator on Tuesday proposed a pilot program to allow tech companies like Uber and Lyft to pay gig workers up to 15per cent ...

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WASHINGTON: The U.S. securities regulator on Tuesday proposed a pilot program to allow tech companies like Uber and Lyft to pay gig workers up to 15per cent of their annual compensation in equity rather than cash, a move it said was designed to reflect changes in the workforce.

The Securities and Exchange Commission said internet-based companies may have the same incentives to offer equity compensation to gig-workers as they do to employees. Until now, though, SEC rules have not allowed companies to pay gig workers in equity.The proposal would not require an increase in pay, just create flexibility on whether to pay using cash or equity.

"Work relationships have evolved along with technology, and workers who participate in the gig economy have become increasingly important to the continued growth of the broader U.S. economy," said SEC Chairman Jay Clayton in a statement. The proposed temporary rules would allow gig workers to participate in the growth of the companies their efforts support, he added, capped at 15per cent of annual compensation or US$75,000 in three years.

Democratic SEC commissioners Allison Lee and Caroline Crenshaw opposed the move, saying alternative work arrangements, including independent contractors and freelancers, have existed for decades across a range of industries and it was not clear why tech companies should be singled out for special treatment.

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