Employee, worker or self-employed? Employment status explained

UK employment law recognises three main types of status: employee, worker and self-employed. Employees get the most rights, workers get a core set such as the minimum wage and paid holiday, and the self-employed get very few. Status depends on how the work is really done, not on what the contract calls it.

What are the three types of employment status?

GOV.UK’s employment status guidance lists employee, worker and self-employed as the main types, with directors and office holders as special cases. The label in a contract is not decisive. Courts and employment tribunals look at the reality of the arrangement and can make a final decision on status.

What rights does each status get?

Each status builds on the one below it. Workers get a core set of rights, and employees get those rights plus more.

The National Minimum Wage from April 2026 is £12.71 an hour at 21 and over, £10.85 at 18 to 20, and £8.00 for under-18s and apprentices. Most people on a 5-day week get at least 28 days’ paid holiday, which is 5.6 weeks.

Self-employed people are mostly outside employment law. They keep health and safety protection, some protection from discrimination and whatever rights their client contract gives them.

How do you tell if someone is an employee?

Someone is probably an employee if most of these are true, according to GOV.UK:

• they must work regularly and do a minimum number of hours
• a manager controls their workload and how the work is done
• they cannot send someone else to do the work
• disciplinary, grievance and redundancy procedures apply to them
• the business provides their tools and equipment
• the contract uses words like “employer” and “employee”

How do you tell if someone is a worker?

A person is usually a worker if they agree to do work personally for payment, have only a limited right to send a substitute, and are not running their own business for a client. Signs include occasional work that either side can turn down, a “zero hours” or “casual” contract, supervision by a manager and tools supplied by the business.

In Uber BV v Aslam [2021] UKSC 5 the Supreme Court held that Uber drivers were workers, not independent contractors.

How do you tell if someone is self-employed?

Someone is probably self-employed if they are self-employed for tax and most of these apply:

• they bid for work or give quotes
• they work without direct supervision
• they invoice for completed work
• they pay their own tax and National Insurance
• they get no holiday or sick pay
• the contract is a “contract for services” or calls them a consultant or contractor

Which status applies? A quick decision list

1. If the person runs their own business, quotes for work and can send a substitute, they are probably self-employed.
2. If they must do the work personally but can turn work down and have no fixed hours, they are probably a worker.
3. If they must do the work personally, are controlled by you and have regular hours, they are probably an employee.
4. If you cannot decide, contact Acas for advice and use HMRC’s tool for the tax position.

Is employment status the same for tax?

No. GOV.UK says a person may have a different status in tax law. For tax there are only two outcomes: employed, with tax and National Insurance through PAYE, or self-employed, paying through Self Assessment. “Worker” is not a tax category.

HMRC’s Check Employment Status for Tax (CEST) tool gives HMRC’s view. HMRC says it will stand by all results as long as the information you give remains accurate. The same tool checks whether the off-payroll rules apply where a contractor works through their own company; see IR35 explained.

What is changing in 2026 and 2027?

The Employment Rights Act 2025 is changing some status-linked rights. The government’s timeline update, updated 5 November 2026, lists:

• 6 April 2026: the Lower Earnings Limit and waiting days for Statutory Sick Pay were removed
• 1 January 2027: the unfair dismissal qualifying period falls from 2 years to 6 months, for dismissals from that date, and the cap on compensatory awards is removed

The government says all future dates may change. See our guide to Statutory Sick Pay for the new rules.

What employers should do now

• Review casual and freelance arrangements against the tests above.
• Run CEST for each contractor and keep a copy of the result.
• Check probation and dismissal processes before 1 January 2027.
• Budget for the full cost of staff with the employer cost calculator, and see how to take on your first employee.

Frequently asked questions

What is the difference between a worker and an employee?

Both get the minimum wage, paid holiday and rest breaks. Employees also get rights such as maternity pay, notice periods, redundancy pay and protection from unfair dismissal.

Can a contract decide someone’s employment status?

No. Courts and tribunals look at how the work is actually done. A contract calling someone self-employed does not settle the question.

Do workers get Statutory Sick Pay?

GOV.UK says workers may be entitled to Statutory Sick Pay, depending on their circumstances.

Is a company director an employee?

Not automatically. A director is an office holder and is only an employee if they also have an employment contract with the company.

When does the unfair dismissal qualifying period change?

From 1 January 2027 it falls to 6 months for dismissals on or after that date, according to the government’s timeline.