May to crack down on firms exploiting self-employment rules

Posted On: 
20th March 2017

Theresa May will set out plans to tackle companies who deliberately classify staff as self-employed to avoid giving them the benefits due to salaried workers.

Prime Minister Theresa May at the despatch box
PA Images

A government review out later this year is expected to say that more and more firms are using this practice to circumvent employment law, the Times reports. 

By asking staff to register as self-employed or sole traders, companies are able to avoid paying for benefits such as sick pay, maternity leave and pensions contributions. 

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Among the recommendations the Prime Minister is likely to take on board are a new rule meaning companies cannot impose restrictions on staff who are self-employed. 

The work is being led by Matthew Taylor, the head of the RSA and a former adviser to Tony Blair's government. 

“We need to say to firms, ‘If you want to control your workers you will have to respect their rights and provide entitlements to them'," he told ITV1's Peston on Sunday.

“If they really don’t want to control them, that’s fine. But it looks like there are cases where firms both want to control people but not to provide those workers with entitlements and rights.”

Ministers have already been forced to backtrack on one aspect of reforming self-employment following last week's embarrassing U-turn on raising Class 4 National Insurance contributions.