With the UK’s gig economy flourishing and increasing numbers of workers in the country turning to freelance roles as a flexible alternative to traditional employment, businesses across Britain need to understand the impact of hiring staff who are operating independently of their organisation.
Be they freelancers working on a specific project, outsourced employees working on small orders or even external consultants, companies need to be aware of how working with an individual that is self-employed and not a direct member of the firm’s staff will affect their business in terms of employment law. Read on to find out more.
Reforms Mean That You Need to Review the Status of Long-Term Freelancers
One of the biggest recent changes to UK employment law regarding freelancers was in 2019, when a review of the way some organisations operated concluded that a number of gig economy companies were exploiting staff by classing them as self-employed but treating them like in-house staff.
As such, if your firm employs freelancers on a long-term, full time basis, then it should review whether or not they are actually acting as employees, and if so whether or not they should be entitled to benefits such as sick leave and holiday pay. These staff are classified as ‘workers’ under the law, so it’s important that you review the classification of all of your firm’s long-term employees to make sure that you are fully compliant.
Freelance Staff Deserve the Same Respect as All Employees
Under the Equality Act and anti-discrimination laws, freelance employees deserve the same rights to be treated equally and with respect as any member of your organisation. It’s important that every member of your company understands that freelance staff need to be welcomed into the business and its culture in the same way that traditional new hires are.
This approach will ensure that all staff feel supported and that your company maintains a friendly, welcoming internal culture.
Safety Policies Apply to Freelance Staff as Well as In-House Team Members
As well as respect, freelance staff have the right to work in a safe environment, as per the Health and Safety at Work Act. Make sure that your freelance team members receive the treatment they deserve at all times, so that they can work to the best of their abilities.
Agency Workers Have Rights Too
Whether your business is working with staff from an agency, or you intend to allow your team members to work for other companies, you need to make sure that you are aware of the rights of agency workers in the UK. This approach will ensure that you are completely compliant, particularly as, in some cases, agency workers can have different rights to those who work completely freelance.
Paying Freelancers Is Different to Paying In-House Staff
As freelancers are technically self-employed, they need to be paid differently to your in-house team members. Some freelancers will be VAT registered, and others may not be, therefore the way you pay them will vary, so it’s important that you work with your firm’s accountancy team and have them handle the payment for these staff.
Freelancers may have a rolling fee every month, or they may be paid for every job they do for your firm, in which case they will supply with an invoice. If your employee is technically classed as a worker, or HMRC views them as an employee in all but name, then IR35 kicks in and you will have to pay additional taxes, so make sure that you are aware of the status of every employee and understand how they need to be treated.
If in Doubt, Consult the Experts
Employment law can be a challenge for those who don’t have experience, but in the UK courts, ignorance is not a valid defence. As such, if you are unsure about the rules surrounding your firm’s use of freelancers, or indeed of the employment laws governing any member of your workforce, then you should work with an expert law firm to ensure that you’re completely compliant.
To give you an example of what’s available, there’s Axiom Stone’s Employment Law Solicitors who are a great choice for firms that work in niche sectors, as they have a variety of departments and specialists in banking, finance and corporate law, so they will understand how employment law applies to your business and be able to offer you tailored advice.
You should try and find someone like this who has ample experience in the sector you need help with. If you want to browse some other solicitors in the country, you can use the employment law search page here.
Ignoring the Law Could Land You in Court
In the UK, if you flout employment law, then your employee could take you to court. This could lead to serious repercussions for your business, including hefty fines, so it’s important that you work hard to avoid this and keep your business compliant by following these tips.
Freelancers can be a cost-effective solution for businesses that do not have the funds to bring a particular specialism in-house. Use this article to understand the impact that freelance staff could have on your company.