Uber, Lyft and DoorDash will offer equity compensation to their workers under the new Securities and Exchange Commission(SEC) proposal, which suggests paying ‘temporary compensation’ towards measured participation for certain workers.
This pilot programme offers 15 per cent compensation in stocks rather than cash to the employed drivers and food delivery workers. Previously, these ‘gig workers’ couldn’t be paid in equity like regular employees.
Work relationships have evolved with modern technology and gig workers have become an integral part of the broader US economy. Food delivery workers have played a crucial role during the pandemic and improving job security comes as a response to labour activism.
The annual compensation offered will be limited to $75,000 in three years for the gig workers, who “provide services available through the issuer’s technology-based platform or system.”
The compensation is offered under Rule 701 and Form S-8 as introduced by the SEC. The proposed rules reflect the changes brought in by the ‘gig economy’ as well as the pandemic. Other internet-based marketplace platforms may also see this compensation offered to their non-regular employees, but currently that can’t be offered under Rule 701 or Form S-8.
The Commission also proposed more amendments to the rule and the form in terms of modernisation of the equity compensation offering, while simultaneously maintaining investor protections. This proposal will be given a 60-day public comment period before being published in the Federal Register. It remains unclear if the new President of the US, Joe Biden, will finalise the pilot programme.