Employment Status consultation – government response and additional guidance

26 July 2022

Employment status determinations can be incredibly complex. Lots of information is needed to accurately assess if an individual is a worker, employee or self-employed. The government recognise this and in 2018 a consultation was released seeking views on how recommendations from the Taylor review could work and their impacts.

Today (26 July 2022) the government response to that consultation was released. Simultaneously, new guidance to assist with status determination has been published by the Department for Business, Energy and Industrial Strategy (BEIS). The guidance spans across three documents, intended for different audiences:

The detailed guidance is intended to complement existing employment status guidance and will provide the following help:

  • employment status and how it determines the employment rights individuals are entitled to and for which employers are responsible
  • factors determining an individual’s employment status
  • special circumstances and recent developments in the labour market
  • how employment status should be determined for different sectors
  • where to go for further information.

The government's consultation response highlights the following points and areas to look out for in the future:

  • 162 formal responses received, predominantly from representative organisations and trade unions
  • large number of respondents were supportive of employment status reform, however, there is no consensus on how this can be achieved
  • “The government recognises that the employment status framework for rights works for the majority, but that boundaries between the different statuses can be unclear for some individuals and employers. However, the benefits of creating a new framework for employment status are currently outweighed by the potential disruption associated with legislative reform. Although such reform could help bring clarity in the long term, it might create cost and uncertainty for businesses in the short term, at a time where they are focusing on recovering from the pandemic.”
  • the government believes the three-tiered employment status framework is still the correct approach for the UK labour market
  • increased transparency for individuals is needed. This resulted in the guidance published alongside the response
  • the “Calculation the Minimum Wage” guidance will be updated to clarify the interpretation of “working time” for casual and gig economy workers
  • the government is addressing delays in the tribunal system to speed up cases for both individuals and businesses
  • the Government recognises there could be some benefits to greater alignment between the tax and employment status systems, but has decided now isn’t the right time to bring forward proposals.

There are some strong commitments here, however, no timescales in terms of reform. It will take time to assess the impact of the detailed guidance offered or if greater changes are needed to simplify, clarify and ensure ease of compliance.


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