Traditional vs. self-employment

Over the last few decades, the world of work has changed. Traditional approaches to work, having a 9 to 5 or shifts are no longer the sole options. The economic backdrop has led both individuals and businesses to consider more flexible ways of working.

Some companies now prefer to hire freelancers for specific projects as a way to test new ideas. Using freelancers can also be a way to reduce risks or costs. Being self-employed is different to being employed in many ways, and there is a variation between being employed and being a worker. If you’re an employee under contract, the employer, manager or supervisor is in charge of your workload and how the work should be done.

You’re required to work with an agreed regular pattern unless you’re on leave. As an employee, you can expect work to be consistently available. You can’t reasonably refuse to do the work asked of you. In return, you receive a consistent or predictable wage and your employer would contribute to your pension. Also, you’re eligible for benefits like paid holiday time, employer pension contributions and some level of sick pay. Recent developments in employment law have created a new category called worker. If you are classified as a worker, the work you do for an organisation is still under contract, but more casual – work is less structured or more irregular. It could be that you are on a zero-hour contract, working for a delivery platform or driving company or for an agency that provides staff to larger companies.

As a worker, you are not offered regular or guaranteed hours by your employer. You have very little obligation to make yourself available for work, but any work you take on has to be done by you personally, not someone you nominate or employ yourself. Workers don’t get the full rights of employees, but do benefit from some legal protections, including the National Minimum Wage, paid annual leave which has to be accrued. This means earned over time.

Workers also have protected rest breaks and working time limits. Workers are protected by the Equality Act and by laws around whistleblowing. With the increased cost of living, it’s more common for those who are employed to also be workers elsewhere to source additional income, for example, picking up flexible additional work on zero-hour contracts.

There are more options than ever before to create a working lifestyle that meets your needs. Picking up work like this whether via an agency or platform, in your own field, or doing something different is certainly one option. But what about if you have something more concrete to offer or a standalone business idea? Turning side hustles into businesses is something more and more people are doing, but it helps to put some thought in first.

Being self-employed or running your own business can be both intimidating and exciting. It’s important to know what your obligations are before starting. The first move is setting up and registering your business, but what decisions do you need to make?