A radical overhaul of workers’ rights in the burgeoning gig economy could leave small businesses in Kent facing additional costs, it has been claimed.

A major report on working practices – the Taylor Report – recommends that workers for firms such as Uber and Deliveroo should be classified as dependent contractors, with extra benefits.

But while there has been a recognition of the need for changes to reflect the growing numbers of self-employed people, the report has divided opinion.

The government commissioned report makes a series of key recommendations – including employers in the gig economy paying National Insurance contributions for those who are currently classed as self-employed.

However, bosses have warned it will push up costs and reduce flexibility for staff.

Kent has about 135,700 self-employed people, about 13.6% of the workforce – which is higher than the average for the South East at 12.1% and higher than the national average of 10.6%.

However, it is not known how many of these work in the gig economy.

Nationally, 1.1m people are thought to be in the sector with the highest number – 28% – in accountancy, legal advice and consultancy. Just 9% work in courier or delivery services.

The report’s author, Matthew Taylor, said people thought the gig economy gives employers too much power.

He said: “Of all the issues that were raised with us as we went around the country, the one that came through most strongly was what the report calls one-sided flexibility.”

The report recommends that zero-hour contracts should be continued where they provide flexibility for both employee and employer – but with an option for staff to request a move into full-time employment.

Jo James, chief executive of the Kent Invicta Chamber of Commerce, said it was important that any changes did not undermine the UK’s flexible employment market and burden businesses.

She said: “While the notion of a wage premium in exchange for working hours is attractive it could have consequences and push up prices elsewhere.

“A lot of people do have these contracts by choice because they are very flexible and they fit around people’s lifestyles.

So, although it is an area that needs looking at, a lot of people are doing it out of choice and it fits round their lives.”

“A lot of people do have these contracts by choice because they are very flexible and they fit around people’s lifestyles..." - Jo James, Kent Invicta Chamber of Commerce

She added: “The gig economy is a growing economy and it is important that it is looked at. We do need to recognise that it is not a one-size fits all. It is going to put up costs, there is no question about that.”

She said any changes should “give flexibility and security to both sides”.

The Federation of Small Businesses also sounded a note of caution.

FSB national chairman Mike Cherry said: “We welcome having a set of proposals on the table which attempt to strike a balance between fairness and a flexible labour market.

“The new ‘dependent contractor’ status, if done right, should bring protections to those unfairly treated in the gig economy, whilst also protecting the genuinely self–employed.

“However, the tax system must continue to recognise the risk and insecurity faced daily by the genuinely self-employed – this is right in principle.

"Ministers must make no attempt to single them out for tax hikes.”

One company operating in the gig economy is Deliveroo, which delivers food from fine restaurants to couch-loving consumers.

It has expanded into Tunbridge Wells, Sevenoaks and Canterbury.

It makes its money by charging restaurants a commission and adding a fee for customers. It works with more than 100 restaurants in Kent, with 75% being independent.

More than 200 riders work for the company despite a barrage of criticism and court cases against firms operating in the gig economy, with disputes over workers’ rights and pay.

A spokesman for the company said the Taylor Report “rightly highlights both the benefits and popularity of flexible work in the on-demand economy”.

“The government should be under no illusions that any moves to restrict flexibility could undermine the very thing that attracts people to work in this sector..." - Deliveroo spokesman

However, he placed the blame of the disputes on outdated employment laws and warned the government to make sure any new measures “are pro-growth so that companies can continue to expand and create well-paid opportunities for people in the UK”.

He added: “The government should be under no illusions that any moves to restrict flexibility could undermine the very thing that attracts people to work in this sector.

“As we have made clear, we want to continue offering riders the flexible work they want whilst also providing benefits.

“We would welcome the opportunity to work with the government so we can end this trade off between flexibility and security.”

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Many companies in the gig economy offer people who work for them the freedom to choose the hours they work.

Instead of a regular wage, workers get paid for individual ‘gigs’ they work, which would be each time they work as a taxi driver for a company like Uber or deliver a takeaway for a company like Deliveroo.

Yet some businesses in the gig economy have attracted criticism from people who accuse them of exploiting workers without paying them the minimum wage and not offering them security – such as sick pay.

Many firms argue these workers are not staff but independent contractors, and therefore not subject to the same rights as employees.

The Taylor Report was commissioned to examine the gig economy and make recommendations about how it should be regulated in the future.