What is an employment status?

When you employ someone you need to assign them with an employment status. An employment status defines the rights and responsibilities that an employee has at work and therefore determines what is required from the employer; employee’s will have different rights depending on their employment status.

There are three main types of employment status that a person will fall into, they are:

  • Employee
  • Worker
  • Self-employed

Employee

There is often confusion surrounding the differences between an employee and a worker. It is important to remember that all employees are workers, but employees have extra employment rights that don’t apply to workers who aren’t employees. Employers should be aware of the employment status of the people working for them as they are liable for the majority of employment rights for their employees.

An employee is a person who works under the conditions of a contract of employment. The contract will include, but is not limited to, terms of payment, annual leave and working hours. For a contract to be binding, the terms should be put in writing and presented to the employee within two months of them starting work. A contract can be formed of a mixture of verbal and written terms but it is best practice to put it all in writing.

Employees are entitled to the same rights as workers plus:

  • Statutory sick pay
  • The National Minimum Wage
  • The right to request flexible working hours
  • Holiday pay
  • Statutory maternity, paternity, adoption and shared parental leave and pay
  • Statutory redundancy pay
  • Minimum notice periods if their employment is being terminated
  • The right to not be discriminated against

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Worker

A worker is a person who undertakes work personally as part of a contract or not. They generally have to carry out the work themselves but do have a limited right to sub-contract the work to someone else.

Typically these workers include casual workers, zero hour contract workers, agency workers, freelancers and seasonal workers.

The rights that workers are entitled to include:

  • Receiving the National Minimum Wage
  • Statutory minimum holiday pay
  • To not work in excess of 48 hours a week on average, or have the option to opt out of this right if they choose to do so
  • To not be treated less favourably if they work part-time
  • Protection against unlawful discrimination
  • The statutory minimum length of rest breaks

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Self-employed

A self employed person does not have the same employment rights as a worker or employee. They will run their own business and typically will be contracted to service a client. However an individual can be both an employee and self-employed at the same time. For example they could work for an employer during the day and work for their own business in the evenings.

Someone who is self-employed is their own boss. It’s because of this that in most cases they aren’t covered by employment law. However, a self-employed person is entitled to:

  • Protection for their own health and safety
  • Protection against discrimination (in some cases)
  • Their rights and responsibilities set out in their contract with their client

In general the self-employed are not entitled to receive holiday pay.

It is important for employers to know and understand the employment statuses and their rights and responsibilities of their employees, with the rise in the gig economy, companies are being caught out by not knowing the basics.

If you need any further help or guidance for your business in regards to employment status rights and responsibilites, HR Revolution are here to help, please get in touch: +44 203 538 5311 or email: hello@hrrevolution.co.uk or visit www.hrrevolution.co.uk  where our expert CIPD HR professionals are waiting to help you with any questions you may have.

HR Revolution; supporting you, your employees AND your business.

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A version of this article first appeared on breatheHR

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