Understanding Employment Status: A Comprehensive Guide
Knowing about the different employment statuses is important for understanding your legal rights and responsibilities. Whether you’re interested in the complexities of labour laws or seeking clarity on your entitlements, we’ve created this comprehensive guide on employment status to help.
What is Employment Status?
Employment status is the term used to describe someone’s legal in the context of their work arrangement. It significantly impacts the employee’s employment rights and the corresponding responsibilities of their employer. This determines the benefits, legal protections, and tax obligations that apply to them based on their status.
For workers and employees, their status defines their scope of rights like holiday pay, sick leave, maternity leave, protection against unfair treatment or dismissal, and more.
What are the Different Employment Status’s?
When it comes to employment status, there are three main categories: workers, employees, and self-employed. Each of these statuses comes with distinctions that affect their benefits, legal rights, and tax obligations.
Workers
A worker is someone who typically performs a service for an organisation under contract to perform work personally. It also includes those who work in a more casual working pattern, are not offered regular or guaranteed hours by the employer, or who have little obligation to make themselves available to work even though they have agreed to it.
Examples of workers include Uber drivers, freelance workers, and temporary construction workers.
Workers are usually entitled to:
- A written statement of employment that outlines their rights and responsibilities within their role
- National minimum wage
- Paid holidays
- Payslips
- Protection from whistleblowing
- Protection against discrimination
- Protection against less favourable treatment for working part-time.
Employees
Employees work under a contract of employment, this contract could be written or verbally agreed upon. The employment contract gives a clear outline of the employee’s rights and responsibilities, and establishes a clear employee-employer relationship where the employee provides services under the direction of the employer.
Employers typically have a full range of employment rights like statutory sick pay, paid annual leave, maternity/paternity leave, and protection against unfair dismissal. They usually have set hours with guaranteed work. Examples of employees include office workers, retail staff, and professionals like doctors and lawyers who are employed by a company.
An employee’s employment rights include:
Workers are usually entitled to:
- A written statement of employment that outlines their rights and responsibilities within their role
- National minimum wage
- Paid holidays
- Payslips
- Protection from whistleblowing
- Protection against discrimination
- Protection against less favourable treatment for working part-time.
- Statutory sick pay
- Ordinary parental leave
- Shared parental leave
- Maternity, paternity, and adoption leave and pay
- Time off for dependants
- Time off for public duties
- Redundancy pay after 2 years of continuous service
- Claim unfair dismissal
- Get the minimum notice period if they’re dismissed or made redundant
- Make statutory flexible working requests
- Protection against unfair dismissal
What’s The Difference Between a Worker and an Employee?
The key differences between workers and employees are around the degree of control, mutual obligations, and the extent of employment rights. Employees work under a contract of employment, whereas workers operate under more flexible working arrangements with less control from the employer.
Workers often enjoy limited employment rights compared to employees with entitlement to minimum wage and protection against unlawful deductions, however, they lack the benefits that come with a contract of employment and protection employees receive.
Self-Employed
Those who are self-employed include those who work for themselves and run their own business rather than working under a contract for an employer. Self-employed individuals control how they run their businesses, like setting working hours and determining the services. They’re also responsible for paying their own taxes and managing business expenses. Self-employed individuals have limited benefits and rights compared to workers or employees.
Examples of self-employed job roles include freelancers, consultants, and small business owners.
Self-employed people are usually entitled to:
- Protection for their health and safety on a client’s premises
- Protection against discrimination
Although self-employed individuals have limited rights, there are great benefits to their employment status including:
- More control over when, where and how they work
- The potential to earn more money
- A more flexible lifestyle
Understanding the difference between workers, employees, and self-employed is essential for ensuring that rights and responsibilities are properly managed in the workplace. If you’re looking for more information on your rights or responsibilities, get in touch with us now.
Back to News