Working for Yourself?
If you think there is a question about your employment status, you need
to ask yourself the following question:
Do I work under a contract of service (employees) or under a contract for
services (self-employed, independent contractor).
There is no legal definition of a contract of service or of a contract for services.
What matters is the reality of the relationship and not what either party decides.
Employment Status
If the answer is 'yes' to all of the following questions, then you are probably an employee:
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Self Employment Status
If the answer is 'yes' to all of the following questions, it will usually mean
that you are self-employed:
Do you 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 work a set amount of hours?
-Do you decide which tasks to do, and their order
-Are you paid by the hour, week, or month?
-Can you get overtime pay or bonus payments?
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The following is a list of the most important factors used to determine your employment status.
1. Personal service - the right of substitution
In any contract of service, it is essential that the worker is required to provide his
or her services personally.
It is important to decide whether or not a worker could provide a replacement
worker in their absence.
If both parties decide that a suitably qualified or skilled person can be provided
by that worker in his or her absence the situation is very likely to be self-employment.
Just because there is no right of substitution does not necessarily mean that the worker
will be an employee.
2. Mutuality of obligation
A contract of service must include details on the worker's obligation to give personal
service and the engager's obligation to pay the worker for that service.
Such an employment contract will often also indicate that the contractor will provide
work for the duration of the contract during the agreed working hours.
3. Right of control
The employee must be subject to a certain degree of control by the engager although
control need not be exercised in practice. What matters is the right of control.
The engager may control how a worker performs his services, what tasks have to be
performed, when and, or where they must be performed. It is important not that he
does do this, merely that he might.
Just because a worker is self-employed in one job, doesn't necessarily mean he or
she will be self-employed in another job. Equally, if a worker is employed in one job,
he or she could be self-employed in another.
A worker could even be an employee and self-employed at the same time. For example, he or she could:
Can you hire someone else to do your work
-Do you risk your own money?
-Do you provide the main items of equipment needed to
do the 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?
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Be employed as a part-time shop assistant and spend the rest of their
time running their own business from home, or
-Work full-time as an employee at a company, and run a part-time
business in the evening or weekends.