Differences between an employee, worker and self-employed – why you need to know

Check the lists below to recognise the differences in types of people who work for you.

Employees

Someone who works for you is probably an employee if most of the following are true:

  • you require them to work regularly unless they are on leave (e.g. holiday, sick or maternity leave)
  • they are required to do a minimum number of hours and expect to be paid for time worked
  • a manager or supervisor is responsible for their workload, saying when a piece of work should be finished and how it should be done
  • they cannot send someone else to do their work
  • you deduct tax and National Insurance contributions from their wages
  • they get paid holiday
  • they are entitled to contractual or statutory sick, maternity or paternity pay 
  • they can join your pension scheme
  • your disciplinary and grievance procedures apply to them
  • they work at your premises or at an address specified by you
  • their contract sets out redundancy procedures
  • you provide the materials, tools and equipment for their work
  • they only work for you or if they do have another job, it’s completely different from their work for you
  • their contract, statement of terms and conditions or offer letter uses terms like ‘employer’ and ‘employee’ 

Worker

If someone does casual or irregular work for you and most of the statements below apply to them, it is likely they are a worker:

  • they occasionally do work for you 
  • you do not have to offer them work and they do not have to accept it – they only work when they want to
  • their contract with you uses terms like ‘casual’, ‘freelance’, ‘zero hours’, ‘as required’ or something similar
  • they had to agree with your terms and conditions to get work (either verbally or in writing)
  • they are under the supervision or control of a manager or director
  • they cannot send someone else to do their work
  • you deduct tax and National Insurance contributions from their wages
  • you provide materials, tools or equipment they need to do the work

Self-Employed

If most of the statements below apply to someone, it’s likely that they are self-employed because they:

  • put in bids or give quotes to get work
  • have specific pieces of work or projects to do but decide how to do the work
  • are not under direct supervision when working
  • can hire someone else to do the work
  • submit invoices for the work they have done
  • are responsible for paying their own NICs and tax
  • do not get holiday or sick pay when they are not working
  • are required to do unsatisfactory work again in their own time and at their own expense 
  • are responsible for losses and taking profits from their work
  • can provide services to a number of different clients or customers
  • operate under a contract  that uses terms like ‘self-employed’, ‘consultant’, or an ‘independent contractor’ 

Why you need to know this?

Employees, workers and the self-employed have different rights under employment legislation.

Self-employed people should have their terms and conditions of work outlined in a written agreement with you.

Workers and employees have very different employment rights.  Workers have a limited number of rights under employment law which include:

  • the right to the national minimum wage
  • paid annual leave
  • rest breaks
  • maximum working week
  • nightshift limits and health assessments
  • the right not to have unlawful deductions from wages
  • the right not be discriminated against unlawfully
  • the right to be accompanied at a grievance or disciplinary hearing, and
  • protection from whistleblowing

An employee has much more employment protection under legislation which include all the above plus:

  • unfair dismissal rights
  • statutory redundancy payment
  • written reasons for dismissal
  • statutory maternity, paternity and adoption leave and pay
  • time off for dependents
  • right to request flexible working
  • parental leave
  • statement of written particulars of employment
  • itemised pay statement
  • statutory sick pay
  • time off for public duties
  • and many more………….

If you would like to know more then please do contact me.


Image credit:

By JMRW67 (Own work) via Wikimedia Commons

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