Employee vs Self-Employed

Employee Vs Self Employed Law Solicitors Dublin

Employee vs self employed. In today’s rapidly changing workplace, many businesses are often faced with a myriad of atypical work arrangements to consider when looking for staff such as fixed term, part time or permanent contracts of employment. Many employers also look at engaging the services of self-employed contractors or those providing services under a “contract for services”

Getting It Right

It is essential that employers get it right when engaging those under a “contract of service” or a “contract for services” as failure to designate an individual correctly can leave a company with an exposure to tax and other employment related entitlements which may not have been afforded to the person such as holiday entitlements, rest break, protection from unfair dismissal or social welfare entitlements. It does not matter what “label “the employer puts on the arrangement as the courts will always look behind the label to the true nature of the relationship. The designation is extremely important as only employees are entitled to the benefits of employment legislation and rights and therefore a right of action before the Workplace Relations Commission.

The Revenue’s Role

The Revenue have a very useful Code of Practice in determining whether someone is an employee or self-employed and this is available for download here. In determining whether someone is an employee or self-employed, the job as a whole must be looked at. Whilst all of the factors may not apply, an individual would normally be an employee if he or she for example:
  • Control- Is the worker under the control of another person who directs as to how, when and where the work is to be carried out.
  • Ancillary Services- Does the worker supply labour only
  • Compensation- Does the worker only receive a fixed hourly/weekly/monthly wage
  • Substitution -Can the worker subcontract the work or substitute another in their place.

Key Considerations

In considering whether someone is self-employed, some of the factors to be considered are:
  • Does the person own his or her own business?
  • Is the person exposed to financial risk?
  • Has control over how the work is done?
  • Can provide the same services to other people or businesses?
  • Provide their own insurance cover and responsible for their own tax returns
It is important to obtain the right legal advice when choosing whether to engage a self-employed contractor or an employee as failure to do so can be a very costly exercise. The above list is not exhaustive and the overall picture needs to be assessed when determining whether someone is an employee or self-employed. To schedule an initial Employee vs self employed consultation, contact us at +353 (01) 963 7000 or contactie@hatstone.com

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