Employee or Independent Contractor?

UK: What employers need to know when establishing worker status

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From People Management,  Nuri Mirwani discusses a recent case in which a worker was found to be an employee entitled to holiday pay. Nuri offers terrific guidance for engaging with independent contractors. Nuri writes:

Implications for employers

This decision, along with the recent string of cases, indicates that worker status is relevant far beyond the gig economy, and is also an important consideration for employers across all sectors. These decisions have proved that the bar for establishing worker status is surprisingly low: in essence, all that is required is a contract for the provision of services, under which the individual is performing the services personally, and the end user is not a client or customer of a profession or business carried on by that individual.

Employers will need to be even more cautious when taking on independent contractors, as it becomes increasingly difficult to establish true ‘independent’ status. Employers should carry out proper due diligence in terms of working practices and contractual arrangements, in order to identify any potential risks.

In light of the above, employers should consider the below as a steer when engaging independent contractors.

Do

  • Have a written agreement to state the intention of the parties.
  • Allow the individual to sub-contract the work to others or bring in outside assistance so the individual is not only providing their own personal services.
  • Allow the individual to accept or turn down the work if they desire.
  • Ensure there is no obligation to offer any work or further work.

Do not 

  • Provide tools and supplies. One of the hallmarks of independent contractors is that they are required to supply their own tools, equipment, and supplies.
  • Control what, how, where and when work is done. Control is more akin to a worker or employment relationship.
  • Allow the individual to become part and parcel of the organisation by providing the opportunity to be promoted or manage other staff.

Source: What employers need to know when establishing worker status

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