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Self-Employed & Employed – General Criteria.

This content was produced using our experience in the International and UK marketplace tackling  the common question we face about individuals categorised as ‘self employed’ and the indicators that may warrant that ‘employee’ status would be more appropriate or even required.

In most cases it should be clear whether an individual is employed or self-employed. However, it may not always be obvious, which in turn can lead to confusion about the employment status of individuals resulting in a more convoluted consultation process and delays to starting on assignment.

The following information should help in reaching a conclusion on some “quick wins”. It is important that the job as a whole is looked at, including working conditions and the reality of the relationship.

The first question you need to ask yourself is whether the individual performing the work does so “as a person in business on their own account”. This consideration can be a useful indicator of the person’s status and should be always be considered in conjunction with the following points.

Criteria on Whether an Individual is an Employee

  • Is under the control of another person who directs as to how, when and where the work is to be carried out.
  • Is unable to subcontract the work provided.
  • Does not provide tools or equipment for the job.
  • Does not assume any responsibility for investment and management in the business.
  • Is entitled to extra pay or time off for overtime
  • Receives a fixed weekly / monthly wage.
  • Does not supply materials for the job.
  • Is not exposed to personal / financial risk in carrying out the work.
  • Works set hours or a given number of hours per week or month.
  • Works for one person or for one business.

Criteria on Whether an Individual is Self-Employed

  • Has control over what is done, how it is done, when and where it is done and whether he or she does it personally.
  • Is free to hire other people, on his or her terms, to do the work which has been agreed to be undertaken.
  • Provides tools or equipment for the job.
  • Has the opportunity to profit from sound management in the scheduling and performance of tasks.
  • Provides his or her own insurance cover e.g. professional indemnity cover, etc.
  • Costs and agrees pricing for a project or job. Provides materials for the job.
  • Is exposed to financial risk by having to bear the cost of making good faulty or substandard work carried out.
  • Controls the hours of work in fulfilling the job obligations.
  • Can provide the same services to more than one person or business at the same time.

If the answers to majority of questions under one category are “yes”, it is likely this status will apply for the individual and will need to be paid accordingly as either employed or self-employed. It is very much important to note that simply performing work on a temporary basis does not constitute self-employment.

The information presented is general guidance across European markets based on our experience and expertise. If the status is not obvious after review, further guidance should be sought via local government bodies using such tools as: the CEST tool (for UK temporary workers) and the DBA check questionnaire (Dutch based temporary workers). Local country employment law experts are available to complete a further review if needed. Majority of European countries will have there own laws or president that can differ.  

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