Your employment status decides which rights you have: whether you get redundancy pay, sick pay, paid holiday, a minimum wage or protection from unfair dismissal. Many people assume they know their status because of what their contract says, but the label in a contract does not always decide it. What matters is how the working relationship works in practice.
The three main categories
For most purposes, UK law recognises three categories.
- **Employee.** You work under a contract of employment. You normally have to do the work yourself, the employer has to offer work and you have to accept it, and the employer has significant control over how, when and where you work.
- **Worker.** You work under a contract but with less control and fewer protections than an employee. Many casual, agency and some gig-economy workers fall into this category.
- **Self-employed.** You run your own business and take responsibility for its success or failure. You can usually decide how the work is done, can send someone else in your place and can work for several clients.
What each category typically gets
Employees have the widest set of rights, including statutory notice, redundancy pay (with qualifying service), maternity and paternity rights and protection against unfair dismissal, with a qualifying period of service that is under review. Workers generally have rights to the minimum wage, paid holiday, rest breaks, protection from unlawful deductions and protection against discrimination. Self-employed people usually have few employment rights beyond health and safety and protection from discrimination, but they control their own tax, pricing and clients.
Why the label is not the end of the story
Some employers describe staff as self-employed contractors even when the working relationship looks like employment. Courts and tribunals look at the reality: Can you send a substitute? Do you decide your own hours? Do you supply your own equipment? Are you integrated into the business? Do you have to accept the work offered? A job description that says "self-employed" does not settle it.
Questions to ask yourself
- Can I choose how, when and where I do the work?
- Can I send someone else to do it instead of me?
- Do I use my own equipment and take financial risks?
- Am I free to work for other clients?
- Am I treated like other staff in the business, for example in rotas, uniform and management?
If most answers point to control by the business, you may be an employee or worker, even if your contract says otherwise.
Tax and National Insurance
Status also affects tax. Employees pay tax and National Insurance through the employer's payroll. Self-employed people usually register with HMRC, file a Self Assessment return and pay tax and National Insurance on their profits. HMRC has an online tool, Check Employment Status for Tax, that gives a view for tax purposes. It is not the same as an employment rights test.
Agency workers and umbrella companies
Agency workers may have extra rights, such as equal treatment on basic pay and conditions after a qualifying period. If you are paid through an umbrella company, check your payslips carefully and make sure you understand what is deducted.
If you think you are classed wrongly
Gather your contract, payslips and messages showing how the work is arranged. Talk to Acas or Citizens Advice, and consider legal advice before taking action. If you are wrongly treated as self-employed, you could be missing holiday pay and other rights, and time limits for claims are short.
Sources
General information only. Status tests are fact-specific, so take advice on your own case.
We write for jobseekers, check important claims and link to official sources where rules may change.