The UK government last week published guidance to clarify the rights to which gig economy workers are entitled, from the national minimum wage to paid leave, while offering them the same degree of flexibility to take on additional work to top up their income. Additional guidance for employers or engagers is available to help them understand their responsibilities toward their staff.

The publication is a delayed response to the 2018 consultation on employment status that sought views on how to make the employment status rules for employment rights and tax clearer for individuals and businesses. It received 162 responses.

The guidance also follows the landmark Uber Supreme Court judgment in February 2021 that held that individuals in the gig economy are entitled to core employment protections.

Many respondents to the 2018 consultation were supportive of employment status reform, but there was no consensus on what action the government should take.

“This guidance will make it easier for individuals to work out their own status while ensuring that the employment status system remains flexible and continues to adapt to modern working practices,” the government stated. “The government recognizes that the employment status framework for rights works for the majority but that boundaries between the different statuses can be unclear for some individuals and employers.”

The government’s guidance maintained that there is a separate system for determining employment status for tax, which rules out aligning tax status with employment status.

“Today we are tidying up the rules, helping workers understand their employment rights and find out if they are being treated fairly by their workplace,” said Business Minister Jane Hunt.  “Importantly, this one-stop shop guidance is not just for workers; it will also give businesses the confidence and the tools to better support their staff, helping to increase productivity and drive growth.”

The UK has a three-tiered employment status framework, broken down by employee, worker and the self-employed. There are special provisions for other groups of workers such as agency workers.

“This system helps to create a flexible and dynamic labor market but has led to some individuals not understanding their employment status,” the government stated.

The detailed guidance complements existing employment status guidance and provides practical advice and examples for HR professionals on:

  • Employment status and how it determines the employment rights individuals are entitled to and for which employers are responsible.
  • Factors determining an individual’s employment status.
  • Special circumstances and recent developments in the labor market.
  • How employment status should be determined for different sectors.
  • Where to go for further information.

There are two additional pieces of guidance for:

  • Employers or engagers, to help them understand individuals’ employment status so they comply with the law, ensure individuals receive the rights they are entitled to and avoid unnecessary disputes and associated costs.
  • Individuals, to help them understand their employment status so they know their rights, can have informed discussions with their employer about them and can take steps to claim them and have them enforced where necessary.