A worker’s employment status is not a matter of choice and will be very relevant went it comes to Pension Auto-Enrolment. 
Your worker is EMPLOYED if most the following apply:
- They are told what to do, when to do it and how to do it
- They do the work themselves
- They are contracted to set working hours
- They receive overtime or a bonus
- They manage any of the staff in your business
An employed person:
- Will be paid even if there is no work
- Will receive paid holiday and bank holidays
- May receive company benefits such as a pension contribution, company car, use of a pool car or mobile phone as part of their contract
Your worker is SELF-EMPLOYED if most of the following apply:
- They can provide somebody else to do the work they have been contracted to do or hire someone to do the work at their own expense
- They decide what work is done, when, where and how.
- They quote for and are paid a fixed price for a job which is not dependent on time spent
- They carry the risk of making a profit or loss on a job
- They are responsible for putting things right in their own time
- They regularly work for a number of different people
A self-employed person:
- Will pay for their own training
- Have their own insurance to cover the work they do
- Provide the tools and equipment necessary to do their job
- Will incur expenses
If you are unsure of the status of the worker you want to take on there is an Employment Status Indicator (ESI) on the HMRC website which will give you a list of questions to complete. As long as you have completed this accurately you will be able to use this as evidence of a worker’s status with HMRC (remember to print it off or save it!).
