Employment status

Also called Worker status, Employee vs contractor, Self-employed status

Whether someone is an employee, a worker or genuinely self-employed. Decided by the facts, not by what the contract says.

What it means

UK law recognises three broad categories. Employees have the full set of rights. Workers have a narrower set including holiday pay, the minimum wage and rest breaks. The genuinely self-employed have very few.

Tax law has its own, slightly different, categorisation — which is why an arrangement can be self-employed for one purpose and not for another.

Why it matters

Status determines holiday pay, sick pay, notice, unfair dismissal rights, pension auto-enrolment and who accounts for tax.

Getting it wrong is expensive in two directions at once: an employment tribunal claim for unpaid holiday and other rights, and an HMRC assessment for unpaid PAYE and National Insurance, usually with interest and penalties.

The Uber and Pimlico Plumbers cases both turned on this, and both found worker status where the written contracts said self-employed.

What it looks like in practice

The factors that matter: whether the person must do the work personally or can send a substitute, how much control you have over how and when it is done, whether there is an obligation to offer and accept work, and whether they are genuinely in business on their own account.

A written contract is evidence, not the answer. Tribunals look at what actually happens.

What to watch out for

Long-standing "sole-trader" arrangements that have drifted into employment — same person, same hours, same place, for years.

Assuming that because someone invoices you and has a limited company, the question is settled. See IR35.

Where to get proper advice

GOV.UK's employment status guidance and HMRC's CEST tool for the tax side. An employment solicitor or ACAS for anything long-standing or contested.