Crowdworking: brave new (working) world

Crowdworking is not some nerd's utopia or fantasy. Crowdworking has already become reality in the world of work. More than 28 million crowdworkers are registered with American companies Freelancer and Upwork alone. Both companies claim to have "placed" more than 15 million work orders per year. Upwork's turnover is expected to exceed one billion dollars. Similarly, the German company Clickworker claims that about 1.5 million clickworkers are currently registered, showing this to be a quickly evolving area in Germany. The scope of this area remains, however, relatively unknown (shown by the Federal Government's lack of recommendations in its White Paper Working 4.0).

Legal classification

In order to make a legal classification of 'crowdworkers', it is necessary to be clear about what 'crowdworking' means. In practice, crowdworkers are particularly active in writing texts, web research, categorisation and tagging, product data maintenance, checking artificial intelligence systems, surveys and mobile crowdsourcing (such as the creation of geographic data and information, known as "GeoData").

Crowdworkers are not employees according German employment law practice (as they lack integration into the client's company and do not depend on instructions). So does this mean that crowdworkers are an army of digital nomads in a legal vacuum? Far from it - crowdworkers may under certain circumstances be qualified as so-called 'home workers', with significant consequences under German law. In such cases crowdworkers in Germany would be subject to the provisions of the Home Work Act (Heimarbeitsgesetz (HAG)) which includes provisions on protection against unfair dismissal, fixed wages and setting up a homeworking committee at the Federal Ministry of Labour and Social Affairs for crowdworking with the ability to fix a minimum wage.

Another significant consequence of the qualification of crowdworkers as 'homeworkers' would be that full-time crowdworkers who mainly work for the company would be regarded as employees of the company within the meaning of the Works Constitution Act (Betriebsverfassungsgesetz). Where there are a high volume of crowdworkers at a particular company, this can lead to unmanageably large works councils and also impact the co-determination rights of the works council (for example in the event of dismissals).

The issue of social security obligations in relation to crowdworkers is also complex. On the one hand, crowdsourcing is not the same as employment (for which social security contributions would be due). However, an employer in the sense of German social insurance law is a person who awards contracts to homeworkers who work in their own workplace on behalf of and for the account of tradesmen, non-profit enterprises or public corporations, even if they procure raw materials or auxiliary materials themselves (ie crowdworkers are regarded as employees). Similar statutes apply in relation to pension insurance. Given the complexity of this area, both clients and crowdworking platforms should be alive to the legal issues, including the risks and possible working format solutions which could minimise potential liability.

Conclusion

Crowdworking is a relatively new and unknown phenomenon, but one thing is clear: crowdworking in Germany does not take place in a legal vacuum. The application of protection regulations of the HAG to crowdworkers, as well as the Social Security Laws, does not appear to be far-fetched. Urgent action is needed by the legislator to ensure legal security for all crowdworking parties, particularly in the context of its initiative for digitization. This is the only way for crowdworking to develop as successfully in Germany as has been seen elsewhere (such as in the United States).