Report calls for clarification on work status for self employed

The next government should create an online portal which clarifies self employed people’s status for legal purposes and gives them information about their rights and a forum to lodge a complaint anonymously, according to a new report from the Institute of Directors.

The report, Future of flexible working,  says one of the main challenges for government is “the murky divide between the established definitions of employment and self employment”. It says: “We must recognise that self-employment is not without its perils and pitfalls. Statutory sick pay, statutory maternity pay, training support and employer pension contributions are some of the occupational benefits individuals forgo when they become technically self-employed. The self-employment landscape in the UK is in clear need of simplification and clarity. There is a strong case for improving people’s understanding of their employment status, as well as the rights, responsibilities and trade-offs that come with working in different types of employment.”

It adds that 75% of IoD members would support clearer legal definitions of ‘employees’, ‘workers’ and the ‘self-employed’. “While IoD members overwhelmingly value the flexibility that often comes with using the self-employed and non-employee workers, the lack of clarity that exists at the boundary between the two can often be both confusing and off-putting,” it states.

The report makes a range of recommendations, including that advertising of self-employment opportunities should be better monitored with a view to ensuring that associated costs, risks and potential liabilities are clearly stated in marketing materials.

It calls for the Apprenticeship Levy to be opened up to other forms of training and employment so that self-employed people can get better access to training and wants the government to incentivise education providers to expand their provision of computer-based and blended learning opportunities to enhance access to education for the self employed.

The report suggests that a platform should be set up to help self employed people negotiate their rights better.

Other recommendations include calls to better monitor pay for self employed people, to review Class 4 NICs with a view to making tax payments fairer between employed and self employed people, to take action on pension enrolment and other rights for the self employed and to develop a verified, portable ratings file that the self employed can download and take with them to future jobs.

The report came ahead of a GMB report which one in three workers are in precarious employment – that is, working on zero hours, in temporary work, for the gig economy, are underemployed or are at risk of false self-employment.

The survey shows 61% of these suffered stress or anxiety as a result of their job and around as many had been to work unwell for fear of not being paid or losing hours or their job. More than a third said they would struggle to cope with an unexpected bill for £500.

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