Acas, has launched new and updated guidance today to help employers and their staff understand the many different types of employment arrangements that exist in the modern workplace and their legal entitlements.

The revised guidance is released against the backdrop of Matthew Taylor’s review on modern workplaces and reflects changes to the way in which people work, are expected to work in the future, and follows recent legal cases about employment status.

Acas Head of Guidance, Stewart Gee, said:

“We have seen changes in the way many people are working over recent years, with a heightened focus on gig economy working.”Many businesses and their staff may not realise that a working person’s employment rights very much depends on their status. A person who is self-employed or defined as a worker is likely to have different legal rights to someone else who is considered an employee.”We know that people find this a confusing area of the law so we have updated our advice to provide some clarity on the various different types of ways that people can work and the employment rights that they are entitled to.”

There are three main types of employment status:

  • Employee;
  • Worker; and
  • Self-employed.

Employment rights for workers include basic entitlements such as the national minimum wage, holiday pay and protection against unlawful discrimination. Employees have the same rights but can receive more rights such as maternity or paternity leave, itemised pay slips and the right to request flexible working.

Acas’ new revised guidance includes a larger focus on people who are self-employed and umbrella companies.

A person may be classed as self-employed or a contractor if they:

  • bid or provide quotes to secure work;
  • decide when and how to do work;
  • are responsible for their own tax and National Insurance; and
  • do not receive holiday or sick pay when they are available for work.

An umbrella company often acts as an employer to contractors usually through a recruitment agency.

There is a three way relationship between the worker, the umbrella company and the client. Key features include:

  • the client will pay the umbrella company who then makes relevant deductions and pays the workers;
  • an agency worker hired in this arrangement is classed as a worker and is entitled to the same basic rights as other workers; and
  • the payment for work is agreed between the worker and the hirer and is then paid to the umbrella company as its income.

Acas’ employment status advice also covers:

  • Agency workers;
  • Apprentices;
  • Fixed Term Workers;
  • Peripatetic workers (workers with no fixed work base);
  • Piece work;
  • Volunteers, work experience and internships; and
  • Zero hours contracts.

Download Acas’ full guidance >