Employment Status 2022: what it is and what your rights are

8 December 2022 by Robin - 12 minutes of reading time

employment status

What is my employment status? What are my rights? Depending on the work that you do, you could have differing rights and eligibility to benefits. There are a lot of conditions and rules to be considered a worker, employee, self-employed, or an office holder. However, once you know what your employment status is, you may know a little better what benefits you could get. Your Benefits will walk you through how to determine your employment status.

What is my employment status?

Your employment status means the type of worker or employee that you are. There are different types of status. Furhtermore, they indicate what your rights are, as well as the rules your employer has to adhere to. As such, it is important to know your own employment status.

There are different types of employment status. Indeed, if you work, you could be a worker, agency worker, an office holder, an employee, a contractor or self-employed person or a director.

But what does this mean? As your status dictates your rights and benefits you could receive, let’s walk through the conditions for each of them.

Worker employment status

What is my employment status?

There are certain conditions that need to be true in order for certain individuals to be classified as workers. In fact, you may be considered as such if all of the following applies:

  • Your right to subcontract your work (allow someone else to do the work) is limited;
  • Your employer provides work for you for the duration of your agreement or contract;
  • You have an arrangement (or contract) with your employer (does not need to be written) where you agree to provide a service or work in exchange for a reward;
  • The reward can be money, but doesn’t have to be. Indeed, it can be a guarantee of continuing to give you work, or more;
  • The work you are doing is not in the context of your personal limited company. Instead, you agreed with your employer to qualify them as a client or a customer.

Furthermore, different conditions may apply while you still qualify as a worker. In fact, they are the following:

  • You sometimes complete work for a certain business;
  • That work is not offered by said business, and you are in no obligation to have to accept it;
  • Your contracts about the work with said business talk of things such as “zero hours”, “as required”, and terms like “freelance” and “casual”;
  • The terms and conditions of your work for the business were outlined in advance (which can have been done orally or in writing);
  • Above you is a manager or supervisor managing you;
  • You are unable to subcontract your work (meaning letting someone else do it);
  • National Insurance contributions and tax are deducted from your pay;
  • Any equipment or tools and materials required in order for you to do your work are provided by the business. 

Worker rights

If your employment status is worker, you have some rights. For example, your pay must be at or above the National Minimum Wage. Additionally, your wage cannot be illegally reduced. Furthermore, your rights are also the following, you:

  • Cannot exceed 48 hours of work on average weekly. However, you can choose to have this right not apply to you;
  • Are entitled to the statutory minimum amount of time that you can take on your breaks when working;
  • Are entitled to the minimum statutory amount of paid holiday;
  • Cannot be treated worse if beginning to work part-time;
  • Cannot be prosecuted for being a “whistleblower” for misconduct at your place of work;
  • Are protected from being discriminated against.
As a worker, you may not be entitled to certain things. For example, you do not have to receive Statutory Redudancy Pay. You can also take time off for emergencies. You are also entitled to flexible working hours, and you cannot be dismissed unfairly.

Lastly, as a worker, you are entitled to a ‘minimum notice period’ if your work comes to an end (like if you are dismissed).

Employee shareholders employee status

An employee shareholder is a type of employee. More specifically, this employment status means that of employee that has shares of the employer’s or the parent company. You can apply for a job where you would be an employee shareholder.

As an employer, you may want an employee to become an employee shareholder. In order for this to be the case, the employee needs to agree to become an employee shareholder.

The employment rights of an employee shareholder are similar to the employment rights of workers and employees. However, there are also employment rights that employee shareholders are not entitled to.

Finally, the employer and employee need to do certain things in order for an existing employee to have your employment status changed to employee shareholder. This includes the employer giving the employee a written document of what being an employee shareholder will mean. However, it includes more conditions.

Employee employment status

You may qualify as an employee as your employment status if some conditions apply to you. In fact, they do not all have to apply. You may have to work, unless you take a break such as maternity leave, sick leave or vacation. You might be expected to do a minimum amount of work hours, to then be paid for them.

Furthermore, your work could be managed by a supervisor or manager. In fact, they could tell you when your work is done or not. Additionally, you may not be able to subcontract your work. However, you may be able to take paid holiday.

You could be able to take Paternity Pay, Maternity Pay, Statutory Sick Pay or join the pension scheme of the business. Furthermore, you could be subject to the grievance and disciplinary rules of the business. Lastly, some of the following could apply to you:

  • Your employment contract talks in terms such as “employee” or “employer”;
  • Your employer provides equipment, tools and materials necessary in order to complete your job;
  • The steps necessary in order to engage in redundancy are laid out in the contract;
  • The only work that you do is for said employer, or, if you hold another job, it has nothing to do from the work that you complete for your employer;
  • Your place of work is indicated in your contract.

What could I get with employee benefits?

You could get the following for adoption pay:

Statutory Adoption Pay rates in 2022
Time period How much you will receive
The first 6 weeks 90% of your average weekly salary
The following 33 weeks whichever is lower: 90% of your average weekly salary, or £156.66 weekly
You may find out that you are not considered an employee. In this case, it could be possible that you are considered as self-employed.

Employee rights

In order for your employment status to be considered employee, you must work in the context of an employment contract. Furthermore, employees are workers. However, they also have rights that workers do not benefit from. Indeed, employees have everything that workers are entitled to, plus other benefits. 

Indeed, this includes statutory maternity leave and maternity pay, Statutory Paternity Leave and Pay, Statutory Shared Parental Leave and Pay and Statutory Adoption Leave and Pay. Employees can get leave and pay, workers can only get pay. Finally, if you are an employee, you are entitled to Statutory Sick Pay.

In order to get some of these benefits, you may need to have worked for your employer for a continuous amount of time. Such a time period may even be indicated on your contract.

Is my employment status director or office holder?

Your employment status may be director. If this is the case, you are charged with running a limited company for shareholders. Directors do not have the same rights as employees. Instead, they are considered office holders. Indeed, this is for the purpose of National Insurance and tax.

A director may engage in other work. Then, they may have an employment contract. In this case, their employment status will be considered employee for that work.

If you are an office holder. Indeed, you may have been put in your function by an organization or business. However, you may not have made a contract, or are not paid a typical wage. Furthermore, as an office worker, you may have one of the following positions:

  • Being a member of the clergy, or any other ecclesiastical position;
  • Positions such as trustee, done under a trust deed;
  • Being the secretary of a trade union, or a club treasurer, or any other position which contributes to the internal affairs of a business or organisation;
  • Company directors, secretaries, crown appointments and board members, or any other statutory positions.
Office holders are not considered as workers or employees. They can be considered employees, however. For this to be true, they must also have an employment contract with their place of work. Furthermore, their employment status needs to be employee.

How can I be sure I am an office holder?

If you are an office holder, it’s likely that the following applies to you:

  • Your pay consists of “voluntary” (or honorarium) payment, which has National Insurance and tax deducted from it;
  • You do not receive a regular pay for the work or service that you provide;
  • The duties that you are responsible for are not numerous, and necessary through your trust deed, constitution or statue;
  • You basically work in the context of an independent office, and are not managed or controlled in your work;
  • Your work is not done in the context of a service agreement or contract.

What is off-payroll working?

You may be affected by off-payroll working. In fact, your employment status could be worker. Furthermore, you may work to provide a service and do so via your own company or intermediary. Moreover, it could be that you would be considered an employee if you were to be contracted directly.

Then, you could likely be affected by off-payroll working rules. In fact, then, the rules would impact you on a contract-to-contract basis. What this means is that some contracts may be affected by the rules. However, other contracts may not be affected by the rules.

Off-payroll working determines Income Tax and National Insurance contributions. More specifically, what you would need to pay. Most of the time, if a worker is not affected by the rules, they would not have to pay any Income Tax and National Insurance contributions.

However, you could be a worker and be impacted by the off-payroll working rules. If that is the case, you would then need to pay Income Tax and National Insurance contributions. However, you do not need to do anything on your end.

When did the off-payroll working rules changed?

The off-payroll working rules changed on 6 April 2021. Since then, certain groups can determine the rules for off-payroll working. In fact, they include large to medium-size clients. More specifically, those who are not in the public sector. 

Note that the off-payroll rules can be determined in a number of ways. In fact, they may be written. However, they may also be determined verbally. This means that the rules would be told to you out loud, but would not necessarily be written.

Lastly, your contract may not even be written or verbal. In fact, it could be the case that your contract is simply implied. Then, it would not need to be said out loud or even written.

Is my employment status self-employed or contractor?

Worker employment status

Your employment status may be self-employed if you are responsible for and running a business by yourself. If you are self-employed, you do not have the rights of an employee.

You might have been a worker who recently became self-employed. If this is the case, notify His Majesty’s Revenue and Customs. In fact, your rights would then change. You may also be an employee and self-employed all at once (like if you work for an employer but have your own business).

As a self-employed person, you are most often not covered by employment law. This is because you are considered your own boss. However, you have some protection, like against discrimination and for your safety and health. Furthermore, your contracts determine your responsibilities and rights.

Am I self-employed?

Your employment status may be self-employed. Indeed, this could even simply be for tax purpose, even if your employment status is different. If the employer does not qualify for the PAYE scheme, then the worker may not be considered self-employed in tax law.

The worker may not be considered self-employed in employment law if they have either worker or employee rights.

You may be self-employed if you are, for tax purposes. However, a number of the following must also apply to you:

  • Your work is done in the context of a contract which uses words such as “independent contractor”, “consultant” and “self-employed”. These are often called ‘consultancy agreement’ or ‘contract for services’;
  • You have to pay tax and National Insurance yourself;
  • Work that you have completed are documented through invoices;
  • You do receive a statutory amount of sick pay or holiday when you do not work;
  • You are not directly supervised when working;
  • In order to get work, you engage in bids, or give potential customers quotes.

Am I a contractor?

Your employment status may be contractor. In fact, contracts can be considered for self-employed individuals as well. They are able to have the employment status of an employee or worker. In order to be considered an employee as well, they need to engage in work meant for a client, while being employed by an agency.

Furthermore, there sub-contractors and self-employed contractors are considered under a scheme. However, they must be working in the construction industry. The scheme is named the Construction Industry Scheme (CIS).
As a contractor, the way that you have to pay your taxes could be different. Indeed, this is because the rules for contractors experienced change on 6 April 2021. This was done in the context of the ‘working rules for IR35’.

Robin is a writer for Your Benefits, writing about aids that people may be entitled to. He is currently working on his Master in journalism at the Institut Supérieur de Formation au Journalisme in Lille.

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