So, you know that employment status matters (more information here). But do you know whether your consultants are ’employed’ by you?
Here are five key steps to establishing whether you actually employ your consultants:
Personal service – review whether your consultants have to deliver the work personally, or whether they can deliver the work via a substitute. If they have to deliver the work personally, that is a factor indicating they may be an employee.
An obligation to do the work – consider whether your consultants can choose to turn down work that you offer to them. If they have to deliver work that is given to them, that is another factor indicating employment status.
Control – challenge yourself on how much control you have over the consultant. Do they use your equipment, invoice you for the work, rely on your insurance, look to you to authorise holidays (along with many other factors)? If so, each of these indicates employment status.
Documents – read carefully the arrangements that you’ve set out in writing. Do they reflect a self-employed arrangement and what truly happens in practice? Again, if not, you have further factors indicating employment status.
Advice – the test for employment status is multifactorial and complex. If you’re not confident as to the approach to take or the outcome that you’ve determined, consider taking advice. We’ve created a detailed checklist to get you on your way to determining the status of individuals you engage. Get in touch for advice or how to access the checklist.
In our next update, we’ll be considering the key terms you need to consider including / updating in your consultancy agreements to ensure you avoid claims of ’employee’ status. Get in touch for more information on accessing our consultancy agreement template.