November 2018 - Employment Status: An Update

In the July 2018 edition of Members Matters we reminded ITC members of the three different categories of employment law status – employee/worker/self-employed – and of the basic criteria for deciding which of these categories people working for you fall into.

A very recent court ruling, concerning the status of drivers for taxi firm Addison Lee, has reiterated that if employment status is being challenged it will be assessed on the reality of how a working relationship actually functions, whatever the contract says. Stating that a contract is for freelance work will not make it a freelance engagement if the terms and conditions seem to be those of an “employee” or of a “worker”. Factors that a tribunal is likely to take into account will be: whether someone can work for other employers, how they are integrated into the company, who carries the financial risk of a job being done poorly and whether pay can be negotiated by the individual.

Workers do not get all the benefits of employment but, unlike the self-employed, they are entitled to earn at least the national minimum wage and to receive holiday pay. If they reach the appropriate pay threshold pension auto-enrolment also applies.

Don’t forget about interns and work experience workers, some of whom will also qualify for the national minimum wage. HMRC has recently updated its guidance on work experience and internships and has also produced a new podcast on this topic.

If in doubt about employment status do contact ITC. You can check the tax status of many jobs on the HMRC website employment status checker but be aware that this does not cover performers or stage managers, new guidance about their tax status is currently being drafted.