What is worker status?

Employed or self-employed?

Recent cases with the Gig Economy have brought into questions the status of people who provide work for businesses and how easy the lines between employed and self-employed can be crossed.

A worker is defined as an individual who works under a contract under which he or she undertakes to perform work or services personally for the other party to the contract and where the other person is not a customer or client of the individual’s business.

A person is generally classed as a worker if:

• They have a contract or other arrangement to do work or services personally for a reward (your contract doesn’t have to be written).
• Their reward is for money or a benefit in kind, for example, the promise of a contract or future work.
• They only have a limited right to send someone else to do the work (subcontract).
• They have to turn up for work even if they don’t want to.
• Their employer has to have work for them to do as long as the contract or arrangement lasts.
• They aren’t doing the work as part of their own limited company in an arrangement where the ‘employer’ is actually a customer or client.

It is essential to get it right because workers are entitled to certain employment rights, including receiving national minimum wage, protection against unlawful deductions from wages, statutory minimum level of paid holidays, statutory minimum rest breaks, protection against unlawful discrimination, protection from whistleblowing and not to be treated less favourably if they work part-time.

When deciding whether employment status is worker or self-employment there are three essential questions to consider:

• Is there a requirement for the worker’s personal service?
• Is there a sufficient degree of control over the worker?
• Are there mutual obligations to the contract?

Whilst these aspects are not the be all and end all, they are significant factors in deciding whether an individual is a worker or genuinely self-employed.