Employment status

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Worker

A person is generally classed as a ‘worker’ if:

  • they have a contract or other arrangement to do work or services personally for a reward (a contract can be written or unwritten)
  • their reward is for money or a benefit in kind, for example the promise of a contract or future work
  • they only have a limited right to send someone else to do the work (subcontract)
  • their employer has to have work for them to do as long as the contract or arrangement lasts
  • they are not doing the work as part of their own limited company in an arrangement where the ‘employer’ is actually a customer or client

Employment rights

Workers are entitled to certain employment rights, including:

They may also be entitled to:

Agency workers have specific rights from the first day at work.

Workers usually are not entitled to:

Casual or irregular work

Someone is likely to be a worker if most of these apply:

  • they occasionally do work for a specific business
  • the business does not have to offer them work and they do not have to accept it - they only work when they want to
  • their contract with the business uses terms like ‘casual’, ‘freelance’, ‘zero hours’, ‘as required’ or something similar
  • they had to agree with the business’s terms and conditions to get work - either verbally or in writing
  • they are under the supervision or control of a manager or director
  • they cannot send someone else to do their work
  • the business deducts tax and National Insurance contributions from their wages
  • the business provides materials, tools or equipment they need to do the work
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Part of Get your business ready to employ staff: step by step

  1. Step 1 Decide what type of employee you need

    1. Check whether you need full time or part time staff
    2. Check the different types of employment status

  2. and Check you can afford to take on employees

    1. Check how much the National Minimum Wage is
    2. Find out how much National Insurance you need to pay for your employees
    3. Check how much sick pay your employees are eligible for
    4. Check how much you need to pay towards your employee's pension
    5. Check how much Maternity Leave you need to pay your employees
    6. Check how much Paternity Leave you need to pay your employees

  3. Step 2 Make your workplace safe and accessible for employees

    1. Prevent discrimination
    2. Make your workplace accessible for employees with disabilities or health conditions
    3. Keep employee information and data safe
    4. Fire safety
    5. Health and safety

    You also need to make checks when you recruit and employ someone.

    1. Find out what you need to check when you employ someone

  4. Step 3 Register as an employer and set up PAYE

    You need to register with HMRC so you can pay tax and national insurance for your employees.

    1. Register as an employer and set up PAYE
    2. Choose how to run payroll
    3. If you decide to run payroll yourself, choose payroll software

  5. Step 4 Check your responsibilities around workplace pensions

    1. Understand your pension responsibilities as an employer

  6. Step 5 Get Employers' Liability insurance

    1. Find out about Employers' Liability insurance

  7. Step 6 Recruit and employ staff

    1. Employ someone