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Someone who works for a business operating in the UK construction industry may be classified as an employee or a subcontractor. It is important for the business who engages a worker to ensure that they are classified correctly. Penalties may apply if the worker is classified incorrectly.
A worker should be classified as an Employee if most of the following are true:
Other indicators of employment, as opposed to self-employment, may include the worker being able to join the business pension scheme, and being subject to the business’ disciplinary and grievance procedures. If their contract includes redundancy procedures and uses terms like employee or employer, this is a strong indication that a worker is an employee of the business.
If a worker is classified as an employee, they have an employment contract and they have specific employment rights, including the right to Statutory Sick Pay, Statutory Maternity, Paternity, Adoption and Shared Parental Leave and Pay, Statutory Redundancy Pay, minimum notice periods, and protection against unfair dismissal. They also have the right to request flexible working hours and to take time off for emergencies.
Some of the above mentioned rights are only available after an employee has been continuously employed for a certain amount of time.
Some indicators that a worker may be classified as a Subcontractor (and be self-employed) include:
If the worker has a “contract for services” which uses terms such as ‘self-employed’, this may be an indicator that the worker should be classified as a Subcontractor (self-employed).
If you need more information on this subject, or need some help in determining whether a worker should be classified as an employee or Subcontractor, click here to open a new window and fill in a quick form. We will then contact you as soon as possible. Once you have submitted the form, you can close the window and you will be back on this page.