Employee, worker or self-employed: employment status explained

Your employment status decides which legal rights you have at work. GOV.UK describes three main types: employee, worker and self-employed. A person may be an employee in employment law yet have a different status for tax.

Employees

GOV.UK defines an employee as someone who works under an employment contract. It lists signs that a person is probably an employee if most of them are true:

• they are required to work regularly unless they are on leave, such as holiday, sick leave or maternity leave
• they are required to do a minimum number of hours and expect to be paid for the time worked
• a manager or supervisor is responsible for their workload
• they cannot send someone else to do their work
• they get paid holiday
• they are entitled to contractual or Statutory Sick Pay, and to maternity or paternity pay
• they can join the business’s pension scheme
• the business’s disciplinary and grievance procedures apply to them
• they work at the business’s premises or at an address the business specifies
• their contract sets out redundancy procedures
• the business provides the materials, tools and equipment
• they work only for that business, or any other job is completely unrelated
• their contract or offer letter uses terms such as employer and employee

Employees have all the rights that workers have, plus more. GOV.UK lists statutory sick pay, statutory redundancy pay, statutory maternity, paternity, adoption, shared parental, parental bereavement and neonatal care pay and leave, minimum notice periods, protection against unfair dismissal, the right to request flexible working and time off for emergencies. Some of these rights need a minimum length of continuous employment, and the contract may state how long that qualifying period is. Our guides on redundancy rights and your employment contract cover the detail.

Workers

A worker generally has a contract or other arrangement to do work or services personally for a reward. The reward can be money or a benefit in kind, including the promise of future work. Workers have a limited right to send someone else to do the work, and the employer has to keep work available for the life of the arrangement. A person working through their own limited company, where the “employer” is really a client, is not a worker in this sense.

Workers are entitled to:

• the National Minimum Wage
• protection against unlawful deductions from wages
• the statutory minimum level of paid holiday
• protection against unlawful discrimination
• not being treated less favourably if they work part-time

They may also qualify for statutory pay such as Statutory Sick Pay and Statutory Maternity Pay. GOV.UK says workers usually do not get minimum notice periods, protection against unfair dismissal or statutory redundancy pay. All employees are workers, but an employee has extra rights.

Self-employed people and contractors

GOV.UK describes a self-employed person as someone who runs a business for themselves and takes responsibility for its success or failure. Self-employed people are not paid through PAYE and do not have the rights and responsibilities of an employee. Employment law does not usually cover them, because they are their own boss.

A contractor can be self-employed, or can have the status of a worker or an employee. A contractor who works for a client and is employed by an agency has employee status. GOV.UK notes that the rules for contractors changed on 6 April 2021 and points to the off-payroll working rules, known as IR35.

Zero hours and agency work

On zero hours and casual work, GOV.UK says someone is likely to be a worker if most of these apply: the business does not have to offer work and the person does not have to accept it, the contract uses terms like zero hours, the person had to accept the business’s terms to get work, and a manager or director supervises them. Other signs of worker status are that the person cannot send someone else, that tax and National Insurance are deducted from their wages, and that the business supplies the tools or equipment.

Agency workers have specific rights from the first day at work. Agency worker rights and zero hours contracts go through those in more detail.

Checking your own status

Read your contract or offer letter, then compare your day-to-day work with the lists above. If most of the employee points apply, you are probably an employee. If most do not, GOV.UK suggests checking whether you are self-employed. If you still cannot tell, Acas gives free advice, and a tribunal can make a final decision where there is a dispute.