Last reviewed 17 April 2019
When considering using volunteers, apprentices or freelancers and contractors within an organisation, employers need to consider their legal obligations towards them.
Volunteers generally carry out unpaid work for organisations, such as fundraising for charities. One of the most commonly asked questions regarding volunteers is whether they are entitled to the National Minimum Wage (NMW). In short, they are not. This is because volunteers are not technically working for an employer and are therefore not employees. Although a company can provide volunteers with money to cover their expenses if it wishes, this would usually be limited to food, drink, travel or any equipment that the volunteer may need.
It is highly advisable not to provide a volunteer with any additional form of payment or gift for their services as it could result in them being classed as a worker or employee. This would entitle them to the NMW, placing liability on the employer for failure to provide this. Payments do not have to just be monetary; for example, if an employer was to provide the volunteer with travel expenses, even though they walk to work, this would be seen as payment.
An apprenticeship is designed to offer on the job training to employees that allows them to learn, gain a qualification and work alongside experienced staff. Apprentices are entitled to receive the NMW. If they are in their first year of the apprenticeship or aged under 19, they are paid at a separate apprentice minimum wage rate, which as of April 2019 is £3.90 per hour. Despite this, apprentices are entitled to the same rights as employees, including normal working time rules which may be adjusted depending on the apprentice’s age, annual leave accrual and statutory sick pay.
The arrangement should be fully outlined in an apprenticeship agreement if the apprentice is based in England and Wales. Things are slightly different in Scotland. Here, apprentices are engaged on a contract of apprenticeship, which is different to an apprenticeship agreement and means that the apprentice will also need to be managed differently.
Freelancers and contractors
Freelancers and contractors perform services personally for a company and are commonly self-employed. For example, this could include electricians or IT technicians. Contractors will therefore operate in a business of their own account, separate to the company, and control their own hours of work. As they are self-employed, they don’t have any employment rights and therefore will not create extra work for HR.
Despite this, it is advisable to keep an eye on the situation to ensure they are not being managed like a worker. A good way of doing this is through a contract for services agreement. This can be used to outline what the company will provide to the contractor to assist them in their duties, how the contractor will be paid and under what circumstances the agreement will be terminated. It can also confirm that the contractor is free to offer their services elsewhere and that they do not need to prioritise the company in this situation. This clarification can help to avoid the contractor later trying to claim they were a worker or employee for the company, which would entitle them to additional rights.
If your business utilises volunteers, apprentices or freelancers and contractors, and you want further clarification on what you need to provide, speak to a Croner expert on 0808 145 4436.