We’ve said before that Employment Status is a hot topic at present and it’s important to know whether your staff are employees, workers or self-employed. But what are the consequences of getting it wrong?
If you have staff that you believe are self-employed it’s unlikely that you pay them when they take annual leave. If they were a worker or an employee they would be entitled to pay when on holiday.
In a recent case an individual that was treated as self-employed throughout their employment was found to have actually been a worker. They were not paid for their time off and didn’t take their full holiday entitlement each year. The court have ordered that, at the end of their employment, they can claim back pay for all the holiday they should have been able to take and be paid for during the time they were engaged by the company.
Normally, at the end of each holiday year, an employee or worker that hasn’t taken their full leave entitlement will lose it (except in special circumstances such as sickness absence or maternity leave). The court found that this did not apply in this case as the employee was prevented from taking their leave by the very fact that they wouldn’t be paid for it. They were therefore able to claim the full entitlement for each year even though it hadn’t been taken.
It’s therefore important to ensure that you have your staff’s status correct to ensure you’re paying them correctly otherwise it could become a far more costly exercise to pay in the future.
If you require advice on employment status for your staff or in relation to holiday pay contact a Howarths Employment Law Advisor on 01274 864999
