Employee vs. self-employed


Employment Vs. Self-Employment Law Solicitors Dublin

Check out our blog post on employment vs self-employment law here:

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 Revenues 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 https://www.revenue.ie/en/self-assessment-and-self-employment/documents/code-of-practice-on-employment-status.pdf.

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:

  • Is under the control of another person who directs as to how, when and where the work is to be carried out.
  • Supplies labour only
  • Receives a fixed hourly/weekly/monthly wage
  • Cannot subcontract the work or does not supply materials for the job

The above list is not exhaustive and the overall picture needs to be assessed when determining whether someone is an employee or self-employed.


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.

A Tully Rinckey employment law solicitors can provide employers additional insight into the practicalities as well as legal obligations when hiring employees versus engaging self-employed contractors. We can also draft the appropriate contractual documentation and provide you with the benefit of our experience in dealing with these matters.

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