Employers have a variety of important responsibilities towards their staff and these, along with the rights and protections staff are entitled to, vary depending on an individual’s employment status. It is important to understand whether an individual is classified as an employee, a worker or self-employed, to determine which rights are relevant. Employment status also determines the employment related taxes that both the staff member and the employer must pay.
For those in standard regular employment, who are likely to be employees, this may be a relatively simple task. However, it might be harder to determine the employment status of those with more casual work arrangements.
An employer cannot simply choose what status they would like their staff to have, and what is written in an employment contact does not necessarily determine employment status either. What matters is the reality of the working relationship and the degree of control exerted by the employer is often the key factor.
What employment status does your team member have?
Below is a non-exhaustive list, setting out some of the key differences between the three types of employment status and the varying rights and responsibilities that are associated with them.
Employee:
- Likely to have a manager with extensive control over their work and they will be expected to work regularly, with a minimum number of hours
- Has responsibilities towards their employer
- Generally required to carry out their work themselves and are paid a regular wage
- Entitled to all employment rights, although some may require a minimum length of service
Worker:
- Their employer will still exert a degree of control, for example, over their uniform
- Has fewer responsibilities towards their employer and more flexibility over when, how much and where they work
- Generally expected to carry out their work themselves
- Entitled to some employment rights, such as holiday pay, national minimum or living wage and protection against unlawful discrimination
Self–employed:
- Significant freedom and flexibility as they are running their own business (and are responsible for its success or failure)
- Can negotiate the price for their work and can send someone else to carry out the work
- Generally, has no employment rights
Can employment status change?
It is important to remember that employment needs to be kept under review to ensure that it continues to reflect the on-going reality of the relationship.
Any changes in the working relationship between an employer and staff member should prompt a review of employment status. This will help to ensure the individual is benefiting from the correct associated rights and responsibilities, and that both the organisation and the individual are paying the correct employment-related taxes. Failure to do so can lead to individuals challenging their employment status and potentially costly court cases and fines.
If you would like advice on employment status, or other employment-related matters, please contact Chris Cook at chris.cook@salaw.com or on 01727 798089
