SEC Proposes Compensating Certain Gig Workers With Equity

The SEC proposed a rule that would allow, on a five-year trial basis, internet platform companies to partly compensate gig workers with equity.

The proposed rule would amend SA Rule 701 ("Exemption for offers and sales of securities pursuant to certain compensatory benefit plans and contracts relating to compensation") to permit issuers to compensate gig workers who provide services by means of an internet platform with securities. The proposed rule conditions such compensation on the following:

• the issuer must administer and demonstrably have control of the internet platform;
• the securities must be issued in pursuance of a compensation agreement;
• the relevant services for which compensation is paid cannot be related to raising capital for the issuer or trading in the issuer's securities;