Last reviewed 3 August 2022

On 7 February 2018, the Government published its response to the Matthew Taylor Review of Modern Working Practices.

This, together with the results of several related consultations, can be found here.

The Department for Business, Energy and Industrial Strategy (BEIS), Treasury and HM Revenue and Customs (HMRC) has now published, available at the same link, a further response together with guidance on Employment Status and Employment Rights.

This is in three parts: guidance for HR professionals, legal professionals and other groups; support for individuals; and a checklist for employers and other engagers.

“It will make it easier for individuals to work out their own status while ensuring that the employment status system remains flexible and continues to adapt to modern working practices,” the Government said.

It notes that a large number of respondents were supportive of employment status reform but that there was no overall consensus on what action the Government should take.

Respondents agreed that there was no easy solution, and it would be complex to implement any reform around employment status.

“The benefits of creating a new framework for employment status are currently outweighed by the potential disruption associated with legislative reform,” the Government concludes. “Although such reform could help bring clarity in the long term, it might create cost and uncertainty for businesses in the short term, at a time where they are focusing on recovering from the pandemic.”

Comment by Kate Palmer, HR Advice and Consultancy Director at Peninsula

Employment status can be a confusing area for many employers, so any guidance is always welcomed.

Where staff are employed under the wrong status, there can be significant risks of tribunal claims for breaching statutory entitlements. Where these claims are successful, the compensation for non-payments owed by the employer will likely be substantial.

As such, when introducing a new person into the business, and at regular points throughout their engagement, it is beneficial to assess whether the correct employment status has been adhered to.