Taken from UCATT web-site.
Bogus self-employment is a huge problem in our industry. Many workers are registered by contractors as being self-employed when they should not be. This is good for the contractor. They do not have to pay national insurance contributions and can shirk many of the responsibilities they would have to have for their employees. This is not beneficial for the worker.
Having a self-employed status means losing many rights that employed staff are entitled to by law. You have no rights to sick pay. You cannot take paid holiday. Health and safety also tends to deteriorate where workers are not directly employed and training almost definitely goes out the window.
It’s no wonder that bogus self-employment has rocketed in the industry. So how can you tell if self-employment is bogus? Well there are no hard and fast definitions. Over the years, when these matters have gone to court, they have stood back and examined the overall relationship between the company and the worker. They use a number of tests and factors to help them make this decision. Below are some of these to help you work out if you are being denied your rights.
If the answer to most of these question below is “yes”, the chances are you are an employee:
•Do you have to do the work yourself?
•Can someone tell you at any time what to do, where to carry out the work or when and how to do it?
•Do you have to work a set amount of hours?
•Can someone move you from task to task?
•Are you paid by the hour, week, or month?
•Can you get overtime pay or bonus payment?
If however you answer yes to most of the below questions, the chances are that you are self-employed:
•Can you hire someone to do the work or engage helpers at your own expense?
•Do you risk any of your own money?
•Do you provide the main items of equipment you need to do your job, not just the small tools that many employees provide for themselves?
•Do you agree to do a job for a fixed price regardless of how long the job may take?
•Can you decide what work to do, how and when to do the work and where to provide the services?
•Do you regularly work for a number of different people?
•Do you have to correct unsatisfactory work in your own time and at your own expense?
Another good way to determine your real employment status is to use the HM Revenue & Customs Employment Status Indicator at
https://esi2calculator.hmrc.gov.uk/esi/app/landing-page.html
---------- Post added at 09:19 PM ---------- Previous post was at 09:11 PM ----------
Umbrella contracts:
Holiday Pay
Umbrella Companies are now expected to act as employer to their contractors and, as an employee of ContractorUmbrella, it means you are entitled to 28 days holiday per financial year.
Under the Working Time Regulations, holiday pay must be shown as a separate entry on the employee’s payslip when they take annual leave rather than included within their pay rate. The practice of including holiday pay within the pay rate is also known as 'rolled-up holiday pay' and is unlawful. An Umbrella Company that is operating rolled-up holiday pay is therefore not acting compliantly as your employer.
Umbrella Companies could not possibly pay out holiday at your actual contract rate, as the fees they charge would simply not permit this. As an example of this, a contractor earning £600 per day would be entitled to £ 16,800 per year in holiday pay. Our weekly fees of £ 26.50 would barely cover a fraction of this!
Holiday pay is therefore taken as a deduction from your weekly or monthly payments and paid back when you take time off.
As an employee of ContractorUmbrella, you are entitled to a salary made up of two parts. You are guaranteed a minimum wage payment for the hours/days invoiced for, regardless of whether we have received payment or not. Anything you earn above the minimum wage rate is paid to you as a bonus. This pay structure allows us to base your holiday deductions on the minimum wage.
Holiday will be calculated as follows:
Weekly invoices:
28 days per year x 7 hours per day @ £6.08 per hour (NMW) / 52 weeks = £22.92 holiday pay
Monthly invoices:
28 days per year x 7 hours per day @ £6.08 per hour (NMW) / 12 months = £99.31 holiday pay.
By basing holiday pay on the minimum wage, we are ensuring that we are taking as little as we possibly can, whilst still offering you a fully compliant service. Some Umbrella Companies will base holiday deductions on a percentage, but we have ensured that everyone who uses ContractorUmbrella has the same amount deducted each week/month, regardless of earnings.
Any days taken as holiday are paid out at minimum wage i.e. 1 day holiday = 7 hours @ £6.08 = £42.56. If we were to pay out holiday pay at your actual contract rate, it would mean that we would have to deduct an awful lot more. Following on from the example above, to pay out holiday pay at £600 per day we would have to deduct either £323.08 as a weekly amount or a monthly amount of £1,400 to achieve 28 days holiday per year.
Please be reassured that although holiday pay is deducted, this remains your money. You can enter holiday days on our system for any days you are contracted to work, but didn’t. You can select ‘Full’ view in the timesheet section and this will allow you to submit holiday days to us.
Once you have submitted a holiday timesheet, your holiday pay will be included with your next invoice payment following that period. If you have not accrued enough holiday pay to refund the total number of days entered as holiday, we will pay out as many full days as possible.
Any unused holiday pay will be refunded to you either when you leave or before the end of the financial year, whichever comes first.
