Defining employment status: employee, worker or self-employed?

Correctly defining employment status is incredibly important for employers and business owners. In Employment Law, it’s a person’s employment status that dictates what rights they are entitled to while working for your business.

Unfortunately, definining employment status for the purpose of employment rights is quite complex and not as clear cut as, say, for tax purposes, where a person is either employed or self-employed.

That’s because, in Employment Law, there’s a third category. It’s this third category – worker – that sits between employed and self-employed, that’s likely to cause the most confusion. Workers are likely to be working under more casual arrangements – flexible contracts or zero-hours contracts, for example – and are entitled to more employment rights than a self-employed person, but fewer than a traditional employee.

This is a complex and difficult to define area of Employment Law, and one that’s been under more scrutiny since the changes that formed part of The Good Work Plan came into force in April 2020.

In this short guide, we take a look at the different definitions of employee, worker and self-employed and give you a quick overview of the different rights each category is legally entitled to, and your responsibilities as an employer.

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