What is an Employment Status?
Employment status determines your rights and responsibilities at work. It dictates the duties of your employer. However, it may vary as per your employment contract.
An employer will assign the employment status for the new employees. You can owe rights and responsibilities as per your employment status under the employment law.
If you want help on your employment status or law, you can reach out to us anytime!
Let’s discuss the types of employment status!
Types of Employment Status:
You fall under the category of a worker if you fulfill the following conditions:
- You have signed a contract (whether written or not) or an arrangement to do a service for a reward. Your reward is in the form of money or a favor for a future contract or work.
- You should do work yourself, not passing it to someone else ( You have got very limited rights to pass your work)
- You have to do work even if you don’t like it.
- Your employer has to assign you the work till the end of your contract or arrangement.
- You should not be a part of a limited company and the employer should not be your client.
Employment Rights of a Worker:
Workers have certain employment rights that include:
- Receiving National Minimum Wage as per the rules of the state.
- Protection from illegal deductions.
- Being paid for the holidays as per the law.
- The working time should not be more than 48 hours a week and they have the choice to cancel the agreement.
- They should be protected from unlawful discrimination
- They should have the right to report wrongdoings and be secured from whistleblowing.
- They should be treated favorably if they work part-time.
- Should be paid for sick leave, maternity leave, paternity leave, adoption leave, and parental leave as per the statute.
You are entitled as an employee if you work under an employment contract.
Employment Rights of Employee:
We may call employees workers, but employees have some additional employment rights. They have all the rights of workers and their other rights are following:
- Statutory sick pay.
- Sick, maternity, paternity, adaptation, and parental leave and pay.
- Before dismissing from the job, an employer should provide a minimum notice period.
- Protection from unfair dismissal.
- They should have the right to request flexible working.
- Off time for emergencies.
- Redundancy pays as per the law.
Some rights are granted after a certain period of continuous employment mentioned in the employment contract.
Employment Status for an employee:
Employees should adhere to the following:
- They should work regularly unless they are on leave.
- They should work for a minimum number of hours and should be paid for that.
- A supervisor or manager should be responsible to handle the workload.
- They can replace someone else on their behalf at work
- They should be paid for holidays too.
- They have the choice to join a business pension scheme.
- The procedures of disciplinary and grievance of business apply to them.
- They should work on business premises and the areas specified by the business.
- Businesses are liable to provide the tools, equipment, and material for their work.
- They should be entitled to employers in the employment contract.
If most of the above-mentioned conditions are not applicable to you, then you would be titled self-employed.
You are self-employed if you are taking the responsibilities of your business and you are solely responsible for the failure and success of your business. The rights of self-employed vary from employee and they are not paid through PAYE. A person can be an employee and self-employed at the same time.
Employment rights of self-employed:
Employment laws do not apply to self-employed in most cases as they are their own boss. However, they have the following rights:
- They have the right of protection for their health and safety. And they may have the right of protection against discrimination in some cases.
- Their rights and responsibilities are mentioned in a contract with the client.
Employment status of Self-employed:
HMRC will classify self-employed people for tax purposes even if they are not required to comply with employment law. Employers should ensure whether a person working for him is self-employed in:
- Tax law, if one is exempt from PAYE.
- Employment law, whether he’s having the rights of an employee.
Let us deal with HMRC on your behalf regarding tax law and employment law!
Directors operate a limited company on behalf of shareholders. The responsibilities and rights of directors vary from employees. They are categorized as officeholders for tax and NICs. If a director performs other works that are not related to being a director and have an employment contract, they can claim employment rights.
5. Office Holder:
A person having a certain position in a company without a contract or receives regular payment can be called Office Holder. It includes:
- Appointments of directors, secretaries, board members, and crown under the statute.
- Appointments by internal laws of organizations like trade union secretaries.
- Appointments under a trusted deed.
- Ecclesiastical appointments like members of the clergy.
They are neither workers nor employees. But, if the officeholder holds an employment contract with the same company, the person can be entitled to an employee.
Employment Status of an Office Holder:
A person is an officeholder if the below condition applies:
- There is no contract of service with an organization.
- he/she has minimal responsibilities under statute or trust deed.
- Has no salary or regular payment like employees.
- Only receives volunteering payment and his tax and NICs are paid by their appointing bodies.
- He/she works under an independent office without any supervision or control of appointing bodies.
Final decisions regarding employment purposes under employment status are taken by a court or employment tribunal. In addition, HMRC can also entitle a person self-employed for tax purposes.
If you are still confused on employment status, you can contact us for assistance.