Page 40 - CMA Journal (Jan-Feb 2026)

Focus Section

4) Gig Economy vs. Traditional Employment 2) Welfare Gaps: Social Security and Benefits - Gig
workers are denied access to major social security
The difference between the Gig Economy and traditional
programs:
employment emphasizes the key differences in worker
engagement and protection. • Social Security: They are denied access to the
Employees' Old-Age Benefits Institution (EOBI)
Gig Traditional and Provincial Employees' Social Security
Feature Institutions (PESSI/SESSI).
Economy Employment
Job Type Temporary, Permanent, full-time • Wages and Leave: They are denied access to
freelance Minimum Wage, Overtime Pay, and Paid Sick or
Work Schedule Flexible, self- Fixed hours, set Annual Leave.
chosen schedule • Job Security: They lack protection against unfair
Income Varies per Steady salary or hourly dismissal and notice periods; instead, they can be
job/task wage instantly deactivated from platforms.
Benefits None (usually) Health insurance, paid
leave, retirement plans • Algorithmic Control: They lack algorithmic
control with due process, meaning platform
Job Security Low, task- High, long-term
based employment decisions, such as deactivation, are often opaque
and hard to challenge.
5) Economic Significance and Legal Platform-offered benefits are often inconsistent, forcing
Status in Pakistan gig workers to bear the full financial and health risks of
their work.
The Gig Economy holds significant economic importance
in Pakistan. A prominent demographic feature is that a 8) Emerging Regulatory Efforts
majority, seventy percent (70%), of freelancers are under Countries are moving to address these legal gaps
thirty (30) years old. internationally. To establish state-level protection funds,
As per the Online Labor Index, 2021, Pakistan presently India enacted the Gig and Platform Work Act, 2021.
ranks 4th worldwide in freelancing, behind only the USA, Europe has proposed a new directive for platform work,
India, and Bangladesh. This sector is a significant source 2024, imposing employer obligations for insurance. The
of foreign exchange, generating export earnings of over UK has also introduced a category known as ‘Dependent
$400–500 million per annum. Information Technology Contractor,’ making gig workers entitled to minimum
(IT), Designing, Content Writing, and Accounting and wage and holidays.
Finance are the main sectors where this activity thrives. In Pakistan, regulatory efforts mainly
6) Why Gig Workers Are Excluded focus on facilitation:
from Traditional Labor Laws The National Freelancing Facilitation Policy, 2021
underlines tax incentives, including zero percent (0%) tax
Despite its economic contribution, the legal status of gig
for freelancers in Information Technology (IT) registered
workers in Pakistan remains informal, and policies are with the Federal Board of Revenue (FBR). This policy does
currently under discussion. Gig workers are excluded from
not address social protection for freelancers.
traditional labor laws due to their classification; they are
universally categorized as Independent Contractors. This Proposed Legislation includes the Islamabad Capital
classification results in their exclusion from the nation's Territory Platform Workers Protection Bill, which defines
existing labor laws, i.e. the Factories Act 1934, Minimum minimum rights and prevents misclassification.
Wages Ordinance 1961, and Industrial Relations Act 2012. Currently, freelancers are legally recognized as
Thus, no legal protection is available under traditional self-employed in Pakistan and comply with tax laws
labor laws because of the nature of gig work. governed by the Federal Board of Revenue. Their
responsibilities include registration with the FBR,
7) Core Legal and Welfare Gaps
collection of sales tax for local services, and filing of
The universal classification of gig workers as annual returns.
independent contractors has created the following safety
and welfare gaps: 9) Freelancing Laws and Contracts
1) Safety Gaps (Occupational Health and Safety - OSH) Contracts are the primary source of rights and
- There is a basic absence of Occupational Safety and obligations for freelancers. Three key elements are
Health (OSH) standards for gig workers. Effective risk especially important in freelancing contracts: Payment
protection, training, and compensation for Terms, Scope of Work, and Deliverables. The focus on
occupational hazards are largely absent, leaving clear contracts for gig workers is growing globally to
workers vulnerable. ensure timely payment and formal written agreements.

38 ICMA’s Chartered Management Accountant, Jan-Feb 2026