Identifying the Difference between an Employee and Worker
Why care about Identifying the Difference between an Employee and Worker?
Whether or not someone is classified as an employee or worker is important in understanding the obligations your organisation has towards them – and their obligations towards you.
An employee is under your control at work, and you are required to provide:
- Sick pay
- Holiday pay
- Maternity pay (etc.)
- A written contract of employment.
An employee can also claim for redundancy and unfair dismissal (after two years of service).
A worker still has rights. Workers (as well as employees) have the right:
- To be paid the national minimum wage.
- To get paid holiday.
- To receive payslips.
- Not to be discriminated against.
- Protection against whistleblowing.
Someone is classifies as an “employee” if all three of the following conditions are satisfied.
This means that someone on a zero-hours contract will almost always be a “worker” rather than an employer.
If a business is ever sold, only employees will be transferred under TUPE regulations. Workers will not.
Employers are responsible for deducting tax and NI contributions for employees. Where someone is a worker, they will be paid gross – and will account for their own tax and national insurance through their tax return.
An employer is liable for acts done by their employees under course of employment. This liability doesn’t extend to workers/contractors.