Employment status of personal assistants factsheet

Plymouth City Council does not encourage the hiring of self-employed personal assistants, as within employment law it is almost impossible for a personal assistant to be self-employed, and the service user can be taken to a tribunal and may have to pay unpaid tax and penalties.

This factsheet highlights the differences between being an employee and being self-employed in the eyes of the law.

Employee

An employee is someone who works under an employment contract (a person may be an employee under Employment Law but have a different status for tax purposes; the two should not be confused).

Employment rights

All employees are workers, but an employee has extra employment rights and responsibilities that don't apply to workers who aren't employees.

These rights include all the rights workers have and;

Statutory Sick Pay
Statutory Maternity, Paternity leave and pay (workers only get pay, not leave)
Minimum notice periods if their employment will be ending, for example, if an employer is dismissing them
Protection against unfair dismissal
The right to request flexible working
Time off for emergencies
Statutory Redundancy Pay

Some of these rights require a minimum length of continuous employment before an employee qualifies for them. An employment contract states how long this qualification period is.

Working out employment status for an employee

Someone who works for a business or individual is probably an employee if most of the following are true:

They're required to work regularly unless they're on leave, for example holiday, sick leave or maternity leave
They're required to do a minimum number of hours and expect to be paid for time worked
A manager or supervisor is responsible for their workload, saying when a piece of work should be finished and how it should be done
They can't send someone else to do their work
The business or individual deducts Tax and National Insurance contributions from their wages
They get paid holiday
They're entitled to contractual or Statutory Sick Pay, and Maternity or Paternity pay
They can join the pension scheme
The business's disciplinary and grievance procedures apply to them
They work at the business premises or at an address specified by the business
Their contract sets out redundancy procedure
The business provides the materials, tools and equipment for their work
They only work for the business or individual
Their contract, statement of terms and conditions, or offer letter (which can be described as an 'employment contract') uses terms like 'employer' and 'employee'.

Self-employed

A person is self-employed if they run their business for themselves and take responsibility for its success or failure.
Self-employed workers aren't paid through PAYE, and they don't have the employment rights and responsibilities of employees.
Someone can be both employed and self-employed at the same time, for example, if they work for an employer during the day and run their own business in the evenings.

Employment rights

Employment law doesn't cover self-employed people in most cases because they are their own boss.

However, if a person is self-employed:

They still have protection for their health and safety and, in some cases, protection against discrimination
Their rights and responsibilities are set out by the terms of the contract they have with their client

Working out if someone is self-employed

HMRC may regard someone as self-employed for tax purposes even if they have a different status in Employment Law.

Employers should check if a worker is self-employed in:

Tax Law - whether they're exempt for PAYE
Employment Law - whether they have an employee's rights
Individuals and their employers may have to pay unpaid tax and penalties or lose entitlement to benefits if their employment status is wrong.

Checking if they're exempt from PAYE

Someone is probably self-employed and shouldn't be paid through PAYE if most of the following are true:

They're in business for themselves, are responsible for the success or failure of their business and can make a loss or profit
They can decide what work they do and when, where or how to do it
They can hire someone else to do the work
They're responsible for fixing any unsatisfactory work in their own time
Their employer agrees a fixed price for their work; it doesn't depend on how long the job takes to finish
They use their own money to buy business assets, cover running costs, and provide tools and equipment for their work
They can work for more than one client.

Checking their employment rights

Someone is probably self-employed and doesn't have the rights of an employee if they're exempt from PAYE, and most of the following is also true:

They put in bids or give quotes to get work
They're not under direct supervision when working
They submit invoices for the work they have done
They're responsible for paying their own National Insurance and Tax
They don't get holiday or sick pay when they are not working
They operate under a contract (sometimes known as a 'contract for services' or 'consultancy agreement' that uses terms like 'self-employed', 'consultant', or an 'independent contractor').
You can check a person's employment status on the GOV.UK website.

Who can help me?

Plymouth City Council contracts the Enham Trust to provide a local support service and can help with advertising and recruiting staff.

Additional factsheets

Plymouth City Council has produced the following four factsheets:

More information

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