18 Oct 2018
Make sure any self-employed farm workers really are self-employed
Employers have been urged to check staff are self-employed in the eyes of the law or they could owe substantial amounts in back pay and unpaid National Insurance contributions.
Alex Black
It follows a court case from a self-employed salesman claiming he was actually employed and seeking backdated holiday pay and pay in lieu of untaken holiday.
Andrew Vickery, head of rural services at accountants Old Mill, said many farm staff should be classed as employed as the Court of Appeal has referred a number of points to the European Court of Justice (ECJ), including how long accrued leave can be carried over.
“If the ECJ agrees with the Advocate General, there could be considerable administrative and financial repercussions for rural businesses.”
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How to check if a worker should be employed or self-employed?
Employed:
- Has to perform work personally
- Has no control over which tasks to perform and when to perform them
- Works a set number of hours for regular pay
Self-employed
- Can send a substitute in their place
- Can decide when and where to work, and which tasks to perform
- Agrees a fixed price for the work and could make a loss as well as a profit
For employers, the main difference was the need to pay Class 1 National Insurance, equivalent to about £4,500 a year for a worker on a £30,000 salary.
Employees also have rights including statutory sick pay, pension, maternity and paternity entitlements and protection against unfair dismissal.
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