Hm Treasury
Detail of outcome
We have published employment status guidance for employment rights, alongside the government response to this consultation.
This guidance 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 recognises that the employment status framework for rights works for the majority, but that boundaries between the different statuses can be unclear for some individuals and employers. However, the benefits of creating a new framework for employment status are currently outweighed by the potential disruption associated with legislative reform. 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.
Detail of feedback received
This consultation sought views on the current employment status framework, focusing on its complexity, the fact that it was open to interpretation, and the difficulty to resolve disputes and alignment between the frameworks for tax and rights.
We received 162 responses to this consultation:
- the majority were from business representative organisations / trade bodies (20%) and trade unions (15%)
- the remainder were businesses, individuals, accountancy firms, legal representatives, charities / social enterprises and local government / public sector
A large number of respondents were supportive of employment status reform but 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 majority of respondents also felt that the worker category remained helpful and should be retained, with some citing the flexibility it allows individuals and businesses in an evolving labour market. Overall support for the retention of the worker status came from almost all stakeholder groups.
Many respondents were in favour of introducing improved guidance on the employment status boundaries and examples on how to apply the rules to different scenarios.
Original consultation
Consultation description
Were seeking views on whether the options proposed in the Taylor Review of Modern Work Practices could achieve more certainty and clarity for businesses when determining employment status, particularly in relation to the realities of the modern labour market.
We are also seeking to understand the potential impacts and implications of those proposals. In addition, this consultation considers whether there are alternative approaches that could better achieve these aims. For tax, this consultation considers the tests that define the boundary between those currently taxed as employees and those who are taxed on a self-employed basis.
Further detail
On 7 February 2018 we published the government response to the Matthew Taylor Review of Modern Working Practices along with this and 3 other related consultations:
Documents
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