What are employment classification types in the workplace

You can classify your employees by employment contract and employment status. Below, we’ll explain the differences between them.

Employment status

A person’s employment status can help determine what their rights and their employer’s responsibilities are. Some of the different types of employment status in the UK are:

• Worker
• Employee
• Self-employed and contractor
• Director
• Office holder

Usually, an employment status is confirmed with an employee when a business gives them their employment contract or a ‘written statement of employment particulars’ – what was agreed on between an employer and employee and the relationship between the business and the individual working for them. This is typically not merely defined by what the employment contract says, therefore. Courts and tribunals may also provide a final decision on an employee’s status, if required. The UK government website provides detailed information about how different types of employment status affects employee rights.

Employment contracts

Employment contracts refer to a written agreement outlining an employee’s:

• Employment conditions
• Rights
• Responsibilities
• Duties

Usually, the contract states what type of worker the employee is, too. This will include whether the contract is:

• Fixed-term
• Full-time
• Part-time
• Zero-hours
• A freelancer, consultant or contractor contract
• An agency staff contract

Given that these types of contracts have different rules and regulations, it is a good idea for employers to familiarise themselves with them. 

Fixed-term contract employees

Employees are considered to be on a fixed-term contract if they have signed a contract directly with their employer that specifies an end date. However, they are not classified as fixed-term employees if they:

• Are employed through an agency rather than directly by the company
• Are a student or trainee on a placement
• Are working as an apprentice
• Are a member of the armed forces and are being mobilised.

Examples of a fixed-term contract include:

• Covering maternity leave
• Hiring a specialist for a particular project
• Seasonal or casual contract staff taken on during peak periods

Full-time employees

According to UK working time regulations, full-time employees can work a maximum of 48 hours per week, averaged over a 17-week period. This is according to working time regulations. Employees can work additional hours by choosing to opt out of the 48-hour week maximum, but employers cannot force them to make this decision. Employees or young workers under the age of 18 are uA sually not able to work more than eight hours a day or 40 hours a week. 

Part-time employees

The UK government defines a part-time employee as someone who works fewer hours than an organisation’s full-time staff. A full-time worker in the UK usually works 35 hours or more in a week. While full-time roles typically involve 35 hours or more per week, there are no specific government rules outlining the exact hours for part-time contracts. However, employers are required to treat part-time employees fairly and provide the same entitlements as full-time staff in areas such as:

• Sick leave pay
• Maternity, paternity, parental and adoption leave and pay rates
• Pensions and benefits
• Holiday time
• Training and career development opportunities
• Selection for promotion, transfer or redundancy
• Opportunities for career breaks

Related Article: Part-time vs full-time hours: a recruitment guide

Zero-hours contracts

Zero-hours contracts means a worker’s shifts fluctuate or change on a weekly or daily basis. While employers do not have to guarantee regular work through this contract, there are still rules to be adhered to.

Zero-hours contract workers are entitled to some of the same benefits and rights as other workers and employees. This means that they are entitled to statutory annual leave, and like regular workers, they must receive at least the National Minimum Wage. A zero-hours contract worker is also entitled to work for another employer at the same time.

The UK Government offers guidance for employers about zero-hours contracts on its website.

Freelancer, consultant or contractors

Those who run their own business and are working as a contractor, consultant or freelancer for a company or agency, are counted as self-employed. If someone is self-employed, they do not have the rights and responsibilities of an employee. The UK government website provides more detailed information about the regulations for self-employment, including tax obligations, insurance requirements and compliance with relevant laws.

Agency staff contracts

The UK government sets out clear rules and responsibilities for employers hiring staff through an agency. For example, they may have to pay the staff member’s National Insurance Contributions and Statutory Sick Pay. However, it is the agency’s responsibility to ensure that agency workers receive their entitlements under working time regulations.

If an agency worker is continuously employed in the same role continuously for 12 weeks, they are entitled to the same terms and conditions as permanent employees. This includes:

• Breaks
• Annual leave
• Rest periods
• Night work
• Pay
• Working time limits

Best practices for employment contracts

Consider all aspects of the employer-employee relationship

Before classifying employees, take time to determine the level of control you have over their work, the salary provided and the duration of their role. Additionally, consider their contracts, the type of work they perform and the benefits offered to avoid potential misclassification.

Stay compliant with the law

Familiarise yourself with UK employment laws regarding permanent, temporary, full-time and part-time work. This includes understanding minimum age limits, working hours, and overtime regulations to ensure compliance.

This guide provides employers with a clearer sense of how to define both employment status and employment contracts. UK laws outline different conditions and regulations for different types of employment. Therefore, it is useful to be well-versed in these regulations when drafting worker or employee contracts.