Guidance on gig economy working and employment status rights

14 March 2017

Acas has launched new and updated guidance to help employers and their staff understand the many different types of employment arrangements that exist in the modern workplace and their legal entitlements.

The revised guidance is released against the backdrop of Matthew Taylor's review on modern workplaces and reflects changes to the way in which people work, are expected to work in the future, and follows recent legal cases about employment status.

There are three main types of employment status:

  • Employee;

  • Worker; and

  • Self-employed.

Employment rights for workers include basic entitlements such as the national minimum wage, holiday pay and protection against unlawful discrimination. Employees have the same rights but can receive more rights such as maternity or paternity leave, itemised pay slips and the right to request flexible working.

Acas' new revised guidance includes a larger focus on people who are self-employed and umbrella companies.

A person may be classed as self-employed or a contractor if they:

  • bid or provide quotes to secure work;

  • decide when and how to do work;

  • are responsible for their own tax and National Insurance; and

  • do not receive holiday or sick pay when they are available for work.

An umbrella company often acts as an employer to contractors usually through a recruitment agency. There is a three way relationship between the worker, the umbrella company and the client. Key features include:

  • the client will pay the umbrella company who then makes relevant deductions and pays the workers;

  • an agency worker hired in this arrangement is classed as a worker and is entitled to the same basic rights as other workers; and

  • the payment for work is agreed between the worker and the hirer and is then paid to the umbrella company as its income.

Acas' employment status advice also covers:

  • Agency workers;
  • Apprentices;
  • Fixed Term Workers;
  • Peripatetic workers (workers with no fixed work base);
  • Piece work;
  • Volunteers, work experience and internships; and
  • Zero hours contracts.

Follow this link to access Acas' guidance in full.


CIPP comment

With the reform to off-payroll working in the public sector coming into effect in April 2017, HMRC has also produced the new ‘Check employment status for tax’ tool. This service is anonymous and won’t store any information you enter or the result given. You will also be able to print your result for your own records.