Hidden holiday

Pretty much everyone is used to the idea that there are minimum rights for paid holiday for employees.  This first came into UK law in 1998 – when European rules were brought into our law with the Working Time Regulations.

But what many people don’t realise is that – because this comes from Europe – the holiday rights apply to “workers”, not just to “employees”.  Although there are important differences in UK law between a freelancer and an employee, this does not work the same way in European law.

So, because of the European rules, anyone who is contracted to do work personally for you is your “worker” for statutory holiday purposes.  Statutory holiday is 28 days per year for a full timer (including bank and public holidays). So that’s about 12% of a person’s working time (and a person’s pay).  Another way of looking at it is that after every eight and a quarter days of working, you owe your freelancer a paid day off!

The wording of the rules means that you don’t have to give paid holiday to a person if you are “a client or customer of a profession or business undertaking carried on by that individual”.  In that situation, the individual’s own company or organisation would be responsible for their holiday.  But many “self-employed” individuals would count as “workers”, and so be entitled to claim holiday pay, and time off!  Just calling yourself a “client” or “customer” of your freelancer won’t get you out of this, but there are ways you can handle it.

If you have an arrangement with someone on the basis of ‘no holiday pay’ and then it turns out that they do have holiday rights, the work will cost you 12% more than you had planned.  An unexpected hike in your costs always hurts – and it doesn’t need to happen if you sort things out properly from the start.

Which is best for you … self-employed freelancer, or employee?  Come to our short seminar on 2nd March, and get specialist input from Christopher Head on how to decide what’s best for you and your situation.

Course details and how to book

Christopher Head qualified as a barrister, and is retained by Fashion Enter as a specialist adviser.  Christopher is running a series of seminars on the legal side of paying people to work for you.