Employed but company wants employees to be self employed?

HannahCF

Asking for a friend as he's not the brightest crayon in the box... He has recently got a new job as a labourer. He is employed and they pay him via PAYE. He works on a casual basis, so if there is work then he works and if not, then he doesnt.

He told me earlier on the phone that work have told him that he needs to register as self employed. I asked why and he said he doesn't know, but they said that's what he has to do. But I thought if your employed, and they pay you through PAYE then your an employee.

Does anyone know if this is even legal because I don't think it is, it sounds like they are trying to get away from any legal responsibilities.. Im not quite sure.

Does anyone know? I don't want him to go off and register self employed and then end up being in trouble for it.
Thanks in advance.

motorguy

It sounds like they're trying to avoid paying Employers NI which is 13-14% from memory.

Its possibly not that unreasonable - if hes casual labour they want to pay him a day rate. I dont think its illegal.

On the plus side if hes self employed he can claim expenses to offset his tax and all sorts of stuff.

HannahCF

They pay him £50 a day and he works from 8am to 3pm.

NineDeuce

If he is registered as self-employed then he has no protections as an employee. It is an employer's way of getting out of paying holiday pay, sick pay, etc. if necessary.

It is one of the reasons that Uber comes under so much fire...

Samsung_Note2

motorguy wrote: »

It sounds like they're trying to avoid paying Employers NI which is 13-14% from memory.

Its possibly not that unreasonable - if hes casual labour they want to pay him a day rate. I dont think its illegal.

On the plus side if hes self employed he can claim expenses to offset his tax and all sorts of stuff.

Not sure he can be self employed..if he is under direction for his duties,i believe you cant be self employed any more.

My other job is Plant machine driving...and there trying to stamp out those with UTR as were technically under direction.

StevenB12

50 pound per day for an 8 hour shift? He's working well below the minimum wage. Even on that I would be looking elsewhere immediately if I was him. Most agencies looking for a labourer pay anywhere from 8-15 pound per hour.

I currently work in construction as well through the books with my company, but in a similar way we are starting to get sub contracted out to other companies. A bit different than self employed.

I would advise he looks to move on ASAP though. There's never really any 'permanent' laboring jobs about but there are much better, long term jobs out there.

HannahCF

Yeah I told him that its below minimum wage etc, but he was looking for a job for so long after being on universal credit he pretty much took the first thing that came along to get the job centre off his back.

StevenB12

I'd start signing up with agencies and just asking if they have anything. A lot of the lads on the site I work on at the minute are agency workers but most are on at least 10 pound an hour for 8/9 hours a day and are all on long term work, still classed as temporary but if you do a good job the site usually brings you back for further work.

ReadingTim

Samsung_Note2 wrote: »

Not sure he can be self employed..if he is under direction for his duties,i believe you cant be self employed any more.

My other job is Plant machine driving...and there trying to stamp out those with UTR as were technically under direction.

Depends on how long he's 'working' for them in the year: they might be directing him in his duties all week, but if they only do that for 2 weeks out of 52, and other people were directing him for the other 50, then he probably could be seen as self-employed. But if they were telling him what to do 50 out of 52 weeks a year, then yes, he's probably an employee.

So it probably depends on how long the job is going to last as to whether it's illegal or not - I suspect that while it's certainly a way to reduce cost to the builder and push it (and a risk) onto the individual, it's not illegal. It's therefore up to him to choose whether he wants to accept this risk or not, but if (as you say) he's not the sharpest tool in the box, you might want to suggest that he sticks to a PAYE role, for simplicity...

StevenB12

Not only that but if he was to go self employed, self employed as a Labourer only isn't a great option. Most self employed people in the construction industry have a trade behind them, brick layer, painter etc.

lincroft1710

StevenB12 wrote: »

50 pound per day for an 8 hour shift?

8.00 am to 3.00 pm is only 7 hours, less if he has a lunch break