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Wednesday, 3 October 2023

Types of employment status

There are three types of employment status - you could either be a 'worker', an 'employee' or 'self-employed'. Your employment status will help define what rights and responsibilities you have at work. Find out the basic employment rights for each employment status.

Workers

'Workers' are defined more widely than employees and are different from the genuinely self-employed. The status of worker includes individuals working under a variety of contracts. Employees are workers, but employees have different employment rights and responsibilities than workers.

As a worker you are entitled to core employment rights, including the right to:

  • receive the National Minimum Wage
  • protection against unlawful deduction from wages
  • a minimum period of paid holiday (annual leave)
  • minimum length of rest breaks
  • not work more than 48 hours on average per week or to opt out of this right if you choose
  • protection against unlawful discrimination (including less favourable treatment on the grounds of part-time status)
  • protection for 'whistleblowing' (reporting wrongdoing in the workplace)

You may also be entitled to:

  • Statutory Maternity, Paternity or Adoption Pay
  • Statutory Sick Pay

However, you should check your entitlement to these because they depend on a number of different things, including how much you earn.

The key requirements for establishing 'worker' status are that you:

  • have to perform work or services personally and cannot send a substitute or sub-contract the work
  • are not undertaking the work as part of your own business (eg if the 'employer' is actually one of your clients)

Employees

The 'employee' status applies to the largest group of people in the workplace. All employees are workers, but as an employee you have a wider range of employment rights and responsibilities to and from your employer. For example, you will need to give a minimum notice period if you wish to leave your job.

Employees work under an employment contract (also known as a contract of service). This is normally a written contract but doesn't have to be, it could also be spoken or implied or a mix of all three. For more information on employment contracts, read 'Employment contracts'.

As an employee, you rights include all of the rights workers have, plus the right to:

  • a minimum statement of employment terms
  • Statutory Sick Pay
  • minimum notice periods if your employment will be ending (eg if your employer is dismissing you)
  • not be unfairly dismissed
  • maternity, paternity and adoption leave and pay
  • request flexible working
  • time off for emergencies
  • Statutory Redundancy Pay

Some of these rights require a minimum length of continuous service with your employer before you qualify for them.

Some employees may also have enhanced entitlements, over and above their statutory rights. These would be part of your employment contract's terms and conditions. For example, your employer could decide to give you more generous notice periods or sick pay.

Self-employed

Employment legislation does not generally cover self-employed people because you are, in effect, your own boss.

You will benefit from protection for your health and safety and, in some cases, protection against discrimination.

Your rights and responsibilities would be set out by the terms of the contract you have with your client.

Self-employed people are usually identified by the fact that they are in business for themselves and provide a service to multiple clients. Self-employed people are generally more independent than workers. They have far greater control over how and when to deliver the service and who delivers it. They will usually be better able to protect their own commercial interests, although they will bear any financial risk from the business they operate.

If you are self-employed, you must:

  • register with HM Revenue & Customs (HMRC)
  • submit an annual tax return
  • account for your own tax and National Insurance payments

Where to get help

If you are not sure whether you are a worker, an employee or self-employed you should read 'Understanding your employment status'. This will explain the basic tests used when deciding employment status and links to examples of what your work situation might be classified as.

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