What’s happening?
Today, the Supreme Court has confirmed that Uber Drivers are workers and are not genuinely self-employed persons – despite what their contract says. This means that, together with some important employment law rights, the drivers are now entitled to back pay and future pay of National Minimum Wage for all their working hours and also holiday pay based on the same.
Why is this important?
The scope for a business to engage an individual in a self-employed relationship continues to be limited. Couple this with the implementation of IR35 tax legislation (click here to see update), any business would be wise to undertake a proper assessment of existing and new contractor/consultant relationships applying the appropriate employment status test. Getting this wrong means that a business could find itself on the end of a large wage and PAYE bill that they were not expecting.
What should you do?
Undertake an audit of your self employed contractors (whether engaged as individuals or via a company). Each case is fact specific and therefore, be careful to ensure you are applying the legal and tax tests correctly
Act promptly on any findings in respect of those who you thought were self-employed, but who turn out not to be. This will include addressing any requirements you may have to produce an IR35 Status Determination Statement where applicable.
Remember, if you have been treating them wrongly, they may have employment rights you didn’t expect, so any changes should be handled carefully and in line with the law and any relevant contract.
If you need more information please contact us on 0800 2800 421 or email Employment.Alert@trethowans.com to find out how we can help.