The gig economy has changed the way millions of people work around the world. From food delivery to ride-hailing, digital platforms have created new opportunities and challenges.
For many, platform work is a side hustle — a way to supplement their income. However, for others who rely on platform work as their primary source of income, it often means missing out on valuable employee protections.
The European Parliament and the Council of the European Union took a closer look at platform work and recently passed legislation, the Platform Worker Directive, to provide greater protections for platform workers.
Key takeaways:
- The EU Platform Worker Directive eliminates worker misclassification by presuming that platform workers are employees, not contractors.
- The Directive increases transparency regarding how algorithm systems are used to make workplace decisions and allows workers to challenge them.
- It also provides better protections for workers around how their data is processed and used.
What Is the EU Platform Worker Directive?
The EU Platform Worker Directive is a legislative proposal created to tackle one of the most contentious issues in the platform economy: the misclassification of workers.
The Directive aims to ensure fair working conditions for people working through digital labor platforms, such as ride-hailing apps, food delivery services, or freelance marketplaces, by clarifying the responsibilities and duties of platform companies to their workers.
Formally adopted by the European Parliament in 2024, EU Member States must implement the Directive by the end of 2026.
Why Was the EU Platform Worker Directive Created?
While a California state appeals court ruled in 2023 that platform and app-based services, such as Uber and Lyft, could treat workers as independent contractors, the tide is turning in the European Union.
Companies including Uber, Deliveroo, and Glovo have already been found liable for worker misclassification in multiple European nations, including the Netherlands, France, and Spain.
The governments of many countries have been taking a closer look at the issue of false or bogus self-employment. The concern is that workers are being misclassified as contractors but being treated and acting more like employees.
In 2021, EU data showed that more than 90% of the 28 million people (estimated to be 43 million as of 2025) employed via digital platforms were classified as self-employed. However, as many as 5.5 million may have been misclassified.
This misclassification means those 5+ million workers are being treated as employees but being deprived of fundamental labor rights such as the right to:
- Minimum wage
- Paid leave
- Health and safety protections
- Social Security contributions
- Collective bargaining
By setting clear criteria for determining employment status, the Directive aims to ensure platform workers receive the protections they are entitled to.
Key Provisions of the EU Platform Worker Directive
Presumption of Employment
One of the most critical features of the Directive is the legal presumption of employment. Basically, if a platform controls key aspects of the work — such as pay, schedules, or conduct — the workers are considered employees unless the company can prove otherwise.
For workers to be considered employees, companies only need to meet two of the following criteria:
- Setting pay rates or limits on earnings
- Monitoring work performance electronically
- Limiting when or how workers can work, take time off, accept jobs, or use substitutes
- Imposing strict rules on appearance, behavior, or how the job is performed
- Preventing workers from finding their own clients or working for others
If a company meets any of these factors, then the worker is considered an employee. Platform companies can fight this presumption in court, but the burden of proof lies with them, not the worker.
It's worth noting that EU Member States each have flexibility in how they define the criteria that determines employment status. That means that classification and protections for workers may vary slightly from country to country once implementation begins, and platform companies will need to adapt to each country's interpretation of the Directive.
Algorithmic Management Transparency
Platforms often use algorithms to assign tasks, evaluate performance, or even terminate workers. Moving forward, the Directive requires:
- Transparency: Workers must be informed about how algorithms impact decisions, including how and when they receive work tasks.
- Human oversight: Significant decisions (like dismissals) cannot be made solely by automated systems. People employed by the platforms will need to review and weigh in first.
- Worker access: Workers have the right to review and challenge any automated decisions that they believe negatively impact them.
Companies will need to evaluate how algorithms currently impact platform workers and adjust accordingly in order to be in line with the new Directive. This might include creating and documenting the company's policies, especially when it comes to human oversight.
Data Processing
Digital platforms cannot collect data on workers' emotions, private chats, off-duty activity, union activity, or sensitive info like race, politics, religion, health, or biometrics (unless needed for login).
While EU laws, like GDPR, already protect personal data, the Directive goes further by ensuring these rules apply to all platform workers, regardless of their job status.
Platforms must examine their current data policies and make any necessary updates to protect themselves from liability.
Access to Representation
Beyond reclassifying employment status, the Platform Worker Directive ensures platform workers have a stronger voice in the workplace, as well as access to crucial information about how their work is managed.
Under the Directive, platform workers have the right to:
- Join trade unions: Workers can freely join trade unions or similar organizations to advocate for their rights. Platforms must not interfere with union activities or discriminate against workers who organize or participate in collective action.
- Elect worker representatives: Platform workers can choose representatives to speak and negotiate on their behalf. These representatives must be given the necessary tools and access to communicate with workers and engage in social dialogue with the platform.
By enhancing collective bargaining rights, the Directive empowers platform workers to better protect their interests and push for fairer treatment.
What's NOT in the EU Platform Worker Directive?
Some critics say a few key measures are missing from the new legislation. This includes minimum wage standards and the right for workers to disconnect after a certain number of hours worked.
What Companies and Workers Will Be Affected?
The Directive applies to all digital labor platforms operating in the EU, regardless of where the company is based. This includes:
- Ride-hailing apps (like Uber or Bolt)
- Food delivery platforms (like Deliveroo or Glovo)
- Online freelance marketplaces (like Fiverr or Upwork)
- Other digital task-based platforms
Platform workers hired through intermediaries are granted the same protections as those directly employed by digital labor platforms.
What Comes Next?
Member States are required to transpose the Directive into national law by December 2, 2026. This means adapting their legal systems to comply with the new rules, including providing guidance for businesses and setting up enforcement mechanisms.
Platforms will need to reassess how they classify and manage their workers. Now that the working assumption is that workers are employees, the burden is on companies to prove that they should be classified as contractors.
There's no way around it; costs will go up for impacted platforms. Because if workers are classified as employees, employers are on the hook for paying into a country's social programs for services such as healthcare, unemployment insurance, pensions, paid time off, etc.
However, since all platforms will be equally impacted, it won't disadvantage a specific platform.
How Companies Can Prepare for the Transition
Platform companies should start preparing by reviewing their current worker classification process. Companies should also:
- Revise contracts to define the working relationship between workers and the company clearly.
- Maintain detailed records to help prove that platform workers classified as contractors are correctly classified.
- Examine their current algorithm processes and start making any necessary adjustments.
- Create a dispute resolution process to manage workers' challenges regarding their status, the algorithm, and how their data is processed.
Meanwhile, platform workers are encouraged to read and understand their rights under the new rules and seek support to challenge their status if they believe they've been misclassified.
The EU Platform Worker Directive is a significant step forward in regulating the digital economy and ensuring fair treatment for millions of workers. It also signals a broader shift toward accountability, equity, and transparency in the future of work.
Ensure Compliance When Hiring Independent Contractors With RemoFirst
Misclassification isn't only an issue for platform workers. Any industry employing freelancers needs to ensure they are compliant with local employment laws regarding worker classification.
And the stakes are high. Companies found to have misclassified workers could face legal issues as well as potential fines, back pay, owed benefits, etc. The company's reputation could also take a hit, and in severe cases, key stakeholders could even face jail time.
One way to avoid these risks is by partnering with RemoFirst.
We enable companies to hire international contractors in 150+ countries — compliantly. RemoFirst handles worker classification, as well as contracts and payments in the contractor's local currency.
Sign up for free to start hiring and managing contractors on our platform today.
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