In our Employment Law Solicitors practice advising employers, we often come across cases of mistaken legal employment status along with its frequently major impact on both the employer and the individual doing the work. Here’s a summary of key issues from both sides.
The three statuses in employment law are summarised (very simply) as follows:
Self-employed: this person controls their work, their time, uses their own tools, doesn’t have to turn up, can send someone else. They are self-employed, meaning no holiday pay, no minimum wage and generally no rights to make the claims employees could make, and no PAYE.Worker: they can’t send a substitute, they work personally, with some flexibility, they don’t have to accept work BUT they must be on PAYE, they have the right to minimum wage and holiday pay, and the working time regulations apply to them.
Employee: they have to do the work personally, they are under complete control of the employer and are on PAYE, they have holiday pay and minimum wage plus generally rights not to be unfairly dismissed, notice pay and a much wider range of rights and obligations. We have rulings of ‘employee’ status even where they worked via their own, personal company!
Getting status wrong can have a huge impact. Often employers think they have self-employed contractors but, actually, they have workers or employees.
If you have anyone on what you refer to as ‘zero-hours’, ‘consultancy’ or ‘self-employed contractor’ terms, contact us for a free audit.
Being fully aware of the status of your staff will mean that you hugely reduce the risk of unexpected and costly claims.