Guidance

Employment status and rights: checklist for employers and other engagers

Published 26 July 2022

Employers have a variety of important responsibilities towards their staff. There is step-by-step guidance on identifying and meeting those responsibilities when employing staff and when getting ready to employ someone.

All employers or engagers (an engager is a person or business who engages self-employed individuals for work) should carefully consider employment status before taking on staff or independent contractors. This should be kept under review to ensure their employment status continues to reflect the on-going reality of the relationship. Employment status is relevant in all working relationships - it defines the responsibilities employers have to their staff, and what rights and protections staff are entitled to - such as the minimum amount you should be paying, and whether your staff are entitled to paid leave from work like maternity or adoption leave. See the Employment rights table for some key rights broken down by employment status and qualifying periods.

This guidance aims to make it easier for employers and engagers to understand which obligations apply to them. Please note that there is a separate system for determining employment status for tax.

In Great Britain, there are three main employment statuses for determining your staff’s employment rights and protections:

• employees are entitled to all employment rights, subject to the length of time they have worked for their employer (for example, some rights require an employee to have been working continuously for their employer for a certain amount of time to be eligible) and have responsibilities towards their employer such as making sure they turn up to work
• workers ^{[footnote 1]} are entitled to some employment rights such as the national minimum wage or the national living wage, holiday pay and protection against unlawful discrimination. They are entitled to fewer rights than employees, but in return, have increased flexibility over when, how much, and where they work
• self-employed individuals or independent contractors generally have no employment rights but have significant flexibility in deciding whether to work since they are in business for themselves and delivering a service to a client

Assessing employment status

An employer (or engager) cannot decide the status of those they engage based on what they would like that status to be. You can’t simply choose whether someone who works for you is an employee, worker or self-employed. Nor should an employer’s business model seek to exclude individuals from particular entitlements simply by deciding to regard them as ‘workers’ or ‘self-employed. Instead, an employer or engager should consider the facts of each individual relationship in their own right. The correct classification will flow from the reality of the work relationship between them and you. For people who are in standard, regular employment, determining employment status is relatively straightforward as they are likely to be employees. However, it might be harder to determine the employment status of those with more casual work arrangements (such as those on zero-hours, part-time or fixed-term contracts).

There are a number of factors that employers should consider when determining an individual’s employment status.

The individual is more likely to be an employee if they:

• have an employer, manager or supervisor with extensive control over their workload and how their work should be done
• are required to work regularly unless they are on leave
• are required to do a minimum number of hours and expect to be paid for time worked
• can expect work to be consistently available - meaning the employer is required to provide work for the employee and the employee is required to perform work for the employer
• are employed to do the work themselves (provide a personal service) and only have a limited right to send someone else to do the work, that is send a substitute
• do not provide or use their own equipment
• are paid a wage and their financial risk is limited (for example the individual is paid by completing hours of work rather than by completing a task)
• are taxed as an employee meaning they are on PAYE (pay as you earn)

The individual is more likely to be a worker if they:

• have a substantial amount of freedom over where, when and how much they work and mostly do not have obligations to make themselves available for work, but should do work they’ve agreed to
• are under a degree of control from the employer when they are working (for example are subject to a recommended route or wear a uniform, rated by service users and subject to a penalty if they receive poor ratings, told to smile with their greeting)
• work for their employer(s) is often more casual, for example their work is less structured or not does not have regular guaranteed hours
• receive pay that is set by their employer, rather than negotiated by them
• employed to do the work themselves (provide a personal service) and only have a limited right or no effective right to send someone else to do the work i.e. send a substitute
• are an integral part of the business – such as assisting other members of a team or are subject to company disciplinary procedures
• do not tend to actively market their services as someone who regards themselves as self-employed to customers and clients

The individual is more likely to be self-employed if they:

• have significant freedom in when, where and how they work
• are responsible for the success or failure of their business, and can make a financial loss or a profit
• are able to send someone else to do the work without any restrictions (do not have to provide a personal service)
• can negotiate the price for the work – for example they are able to work for different clients and charge different fees
• use their own money to buy business assets, cover running costs, and provide tools and equipment for their work
• are not integrated into the client’s business (for example no company email address, or not subject to disciplinary proceedings), and are able to turn down work if they do not like the fee or price

Example

An individual usually works one day per week in a cosmetic surgery practice as a plastic surgeon, with some flexibility around turning up to work on that day. The individual is highly skilled, decides how the surgery should be performed and is not required to wear a uniform but general Personal Protective Equipment. The work has to be performed at the surgery during opening hours. The individual is integrated into the business (the cosmetic surgery practice markets the surgeon as “our surgeon”) but they also run other separate businesses. They are paid on a day-rate-basis which the individual has negotiated with the practice and they are provided surgical equipment to perform the work. It is expected that the individual will perform the surgery themselves and the individual is unable to send a substitute.

In this example, there is evidence of personal service as the surgeon carries out the procedures themselves. However, there is no obligation for the practice to offer work to the surgeon and no obligation on the surgeon to accept offer of work. The individual is subject to a low amount of control as to how the work is carried out and requirements around uniform but there is control for when and where the individual has to work (during opening hours at the surgery). The arrangement is also not exclusive (as the surgeon works for other organisations), and the individual has negotiated their day rate of pay as opposed to receiving a salary. Overall, it seems this individual is unlikely to be an employee because the practice is not obliged to offer them work, nor is the surgeon required to accept work. The surgeon also has other businesses which might suggest they are self-employed. However, the degree of control that the practice exerts over the surgeon suggests that the surgeon’s relationship with the practice is that of a worker rather than self-employed.

For further examples around assessing an individual’s employment status, please go to the detailed guidance for HR professionals.

Written statement

If any of your staff are workers or employees, you are required to provide a written statement of particulars from the first day of employment. For further information on this please visit written statement of employment.

Review

If anything changes in the working relationship between you and your staff, it is best practice to review their employment status. Individuals have the right to challenge their employment status with you or via legal proceedings if they do not think it is right.

Failing to recognise the right employment status and grant the associated rights to the individuals you work with is a very serious matter than can lead to costly court cases and fines, as employment law is enforced by the courts, tribunals and various inspectorates. An employer should also consider the detailed guidance for HR professionals to help make a more rounded assessment of your staff’s employment status based on the reality of their relationship with you.

Employment rights

A. Worker / employee rights

Statutory right / protection	Employee	Worker	Qualifying period
Unlawful deductions from wages	Yes	Yes	Day 1
National Minimum Wage/National Living Wage	Yes	Yes	Day 1
Paid holidays	Yes	Yes	Day 1
Right to be accompanied at a grievance/disciplinary hearing	Yes	Yes	Day 1
Whistleblowing	Yes	Yes	Day 1
Discrimination, other prohibited conduct under the Equality Act 2010 and reasonable adjustments*	Yes	Yes	Day 1
Equal treatment for part-time workers	Yes	Yes	Day 1
Protection from detriment for trade union membership*	Yes	Yes	Day 1
Itemised pay slip	Yes	Yes	Day 1
Written particulars of employment	Yes	Yes	Day 1
Protection from detriment in certain health and safety cases	Yes	Yes	Day 1
Workplace pension scheme*	Yes	Yes	Day 1
Right to join a trade union and to participate in trade union activities*	Yes	Yes	Day 1

B. Employee rights day 1

Statutory right / protection	Employee	Worker	Qualifying period
Maternity leave and adoption leave	Yes	No	Day 1
Statutory bereavement leave	Yes	No	Day 1
Time off various activities and duties (paid and unpaid)	Yes	No	Day 1
Equal treatment for fixed-term contract staff	Yes	No	Day 1
Unfair dismissal (for certain automatically unfair reasons)	Yes	No	Day 1
Breach of contract	Yes	No	Day 1
Statutory Sick Pay*	Yes	may be entitled	Day 1

C. Employee rights with qualifying period

Statutory right / protection	Employee	Worker	Qualifying period
Minimum period of statutory notice	Yes	No	1 Month
Medical suspension pay	Yes	No	1 Month
Guaranteed pay	Yes	No	1 Month
Shared parental leave and Paternity leave	Yes	No	26 Weeks
Right to request flexible working	Yes	No	26 Weeks
Right to request time off for study or training	Yes	No	26 Weeks
Adoption pay, Shared Parental pay, Paternity pay, Maternity pay and Parental Bereavement pay*	Yes	may be entitled	26 Weeks
Unpaid parental leave	Yes	No	1 Year
Unfair dismissal (ordinary)	Yes	No	2 Years
Written reasons for dismissal (in most cases)	Yes	No	2 Years
Statutory redundancy pay	Yes	No	2 Years

*Further information on specific employment rights and statutory payments is available in the detailed guidance for HR professionals.

1. ‘Worker’ is referring to a limb (b) worker as defined in Section 230 of the Employment Rights Act 1996. For further information, please visit the detailed guidance for HR professionals. ↩