Employment Insight: Government issues new employment status guidance for employers and workers

27 July 2022

The guidance results from calls for clarity around employment status "rules" and rights following a consultation in 2018.

The government has published two guidance notes:

  • Guidance for Individuals. This guidance is to help individuals understand their employment status so that they know their rights and can take steps where necessary to claim/enforce them. A link to the guidance can be found here.
  • Guidance for Employers or Engagers. This guidance is for HR and legal professionals. It aims to give added clarity to individuals' employment status to ensure employers are compliant with the law and avoid unnecessary disputes. A link to the guidance can be found here.

What does the guidance cover?

Each note includes:

  • A summary of the different employment statuses: employees, workers and the self-employed.
  • A table setting out the rights and protections these different groups enjoy.

The Guidance for Employers or Engagers also includes:

  • A summary of the key factors in determining employment status.
  • An overview of the special circumstances and developments in the labour market, including the 'gig' economy, zero hours contracts, consultants, agency workers, volunteers, interns and others.
  • Case studies and sectoral examples.

Both notes highlight that employment status is not determined by the type of contract an individual is on, or what that contract states. Status, as we know, is determined by the reality of the working relationship between the parties.

What should we expect following this guidance?

It is possible we will see an increase in individuals challenging or querying their employment status. This could give rise to employment tribunal claims and potential liabilities for employers/engagers, such as backdated holiday pay. Employers should review the employment status of their workforce and assess the risks if an individual has been 'misclassified'.

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