Should your New Worker be Employed or Self Employed?

Getting it wrong can result in substantial penalties getting it right at the outset will save a lot of time trouble. Current cases involving Uber drivers and bicycle couriers in London highlight issues.

To determine the status, consider if the individual is engaged under a contract for service or services.  To summarise the issues to support self employed status the contractor:

  • Will provide services but may subcontract work
  • Is free to accept or turn down work. The engager is under no obligation to offer any or further work
  • Is likely to be in control of pace of work
  • May subcontract work or bring in assistance
  • Will normally supply all small tools and bring in or hire plant
  • Quote on a job by job basis must rectify faults in own time
  • Can profit from work done
  • Can accept a fixed term contract
  • Has no additional responsibilities or privileges although present on company premises
  • Gains no employee benefits
  • Can terminate if either side is in breach

To support employee status:

  • Only provides personal service
  • Employer is obliged to offer work and the employee is obliged to do as employer requires.
  • Employer may control what how and when work is done
  • Employee has no right of substitution
  • Employer will provide plant and machinery
  • Paid whatever work is done benefits from minimum wage and holiday entitlement.
  • Employee can only benefit Only under a bonus scheme
  • Employee is hired on a Open ended agreement
  • Capable of being promoted
  • Can participate in pension scheme sick pay and enjoy family friendly policies
  • Employee must normally give notice to terminate agreement

Other factors to support a self employed subcontractor

  • Has other full time employees
  • Rent workspace from 3rd party
  • Advertise
  • Has a website
  • Has other clients
  • Does his own billing

 


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