Disguised Employment is simply where a worker carries out work for a client in a manner similar to that of an employee, whilst operating through an intermediary, for example a personal service company.

WHAT DETERMINES A DISGUISED EMPLOYEE

There are a number of tests which determines whether a contractor/worker is in fact a disguised employee and not in business on their own account.

A contractor will typically :

• Have a right of Substitution
• Can demonstrate automatically in how the work is carried out.
• Can demonstrate they are under no obligation to accept work or that the engager has an obligation to offer work
• Opportunity to profit from sound management of task
• Bear financial risk
• Provides own equipment

An employee will typically:

• Be subject to the control of the engager in the way and manner in which they work
• Be under a obligation to provide personal service
• Have a Mutuality of Obligation in so far as the engager is obliged to pay a wage and the worker is obliged to provide his/her own work
• Not bear any financial risk