Employee, worker or self-employed: what difference does it make?

Employees, workers and self-employed people may do identical work. And yet their employment rights and pay prospects could be very different.  

How you are categorised by your employer can make a big difference to your pay and rights. In simple terms, employees enjoy the full range of statutory work rights. Workers who are not employees have fewer entitlements, and the self-employed have almost none. 

The issue of employment status is a particularly hot topic these days as the nature of work becomes increasingly casualised. If they are not careful, people are more likely than ever before to find themselves working on (and sometimes below) minimum wage and on-demand at the beck and call of their employer. Whether your employer is good, indifferent, ignorant or downright dodgy, it pays to be clear about what you are entitled to. 

Here we look at the basic definitions of the employee, the worker and the self-employed person, and what that could mean for you.  

Employees 

As an employee, you area member of staff with an open-ended contract of employment. Your employer tells you what work to do, and when, where and how to do it. You are subject you to disciplinary procedures. Your employer pays tax and National Insurance on your behalf. 

As well as the basic rights afforded to workers (see below), employees can expect: 

• Statutory Sick Pay; 
• statutory maternity, paternity, adoption and shared parental leave and pay; 
• a minimum notice period if your employment is ending; 
• protection against unfair dismissal;  
• the right to request flexible working; 
• time off for emergencies; and 
• Statutory Redundancy Pay. 

Check your contract of employment to see if any of these rights require a minimum length of service before you qualify to receive them. 

Still unsure whether you are an employee or not? More information on the GOV.UK website. 

Workers 

If you fall into the worker bracket, you will have a personal contract with an employer but the employer may not have the same level of control over how you do your work. As a worker, you may be on a permanent contract, a contract fixed for a period of time, or a zero-hours or other casual worker where you are offered work when it is available. 

If you work through an agency, you may be a worker or employee – see the section on Agency Workers. 

The basic rights afforded to workers are: 

• the National Minimum Wage; 
• working time rights (including breaks, paid holidays and a limit on the working week); 
• health and safety protection;  
• the right to join a union; and  
• protection from unlawful discrimination. 

For additional rights and if you are still unsure whether you are a worker or not, there is further information on the GOV.UK website. 

The self-employed 

Self-employment has rocketed in recent years. You are probably self-employed if: 

• you are free to decide when, where, for whom and how you will do work; 
• you can make your own sickness and holiday arrangements; and 
• pay your own tax and National Insurance (although this is not conclusive). 

The only statutory rights to which you are entitled are health and safety protection while you are working for an employer, and in some cases protection from discrimination. 

Bogus self-employment? 

Many people choose to be self-employed, running their own business and controlling their own working patterns. But some unscrupulous employers deliberately miscategorise their own workers as ‘self-employed’ in order to avoid granting them the basic employment rights they are due as workers or employees. This is a big problem in the ‘gig economy’ but also happens with other types of working arrangements.  

The good news is that unions are challenging those corners of the economy where false self-employment has taken hold – and winning. In February 2021, a Supreme Court ruling in favour of two Uber drivers decided they (and by logic, 40,000 more) were in fact workers not self-employed contractors, and therefore had the right to holiday pay, paid rest breaks and at least the minimum wage. This set a vital legal precedent that others are already following.  

To find details of unions operating in your sector, use our Union Finder.