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Self-employed or worker? And why does it matter?

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10/10/2016

HMRC are considering whether to investigate a household name delivery company following allegations by self-employed couriers that they are not being paid the national living wage. If they are truly self-employed then they would not be entitled to the national living wage. If, however, their working practices are such as to entitle them to the status of ‘worker’, they will be entitled not only to be paid the national living wage but also to receive paid holiday and other employment benefits. This is not a lone case. Similar arguments are being made by self-employed taxi drivers for the taxi-app company, Uber.

This issue is also at the heart of a dossier presented by the House of Commons Work and Pensions Select Committee to Theresa May. The dossier calls for the increased protection of self-employed workers within the British labour market.

Employers with atypical workforces (agency staff, zero-hours workers, seasonal/casual workers, self-employed agents etc) should consider whether this is an issue that might affect them in the future. For some employers with large volumes of staff on atypical contracts, it really is a potential ticking time-bomb. It is well worth taking the time, with your advisers, to identify any areas of risk and consider whether any action can be taken to reduce the risk of potential claims in the future.

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