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 not determined solely by what the employment contract states. In some cases, status questions may be resolved through formal processes. 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 working‑time rules, full‑time hours are often assessed against an average weekly limit over a reference period (for example, a 48‑hour average over 17 weeks). Some employees may choose to agree to additional hours using an opt‑out, but any decision should follow your organisation’s process and current official guidance. For younger workers, there are typically tighter hour limits; confirm current thresholds in official sources.

Part-time employees

Current official guidance typically describes a part-time employee as someone who works fewer hours than full-time staff. While full-time roles often involve 35 hours or more per week, there are no specific government rules outlining the exact hours for part-time contracts. 

While full‑time roles often involve 35 hours or more per week, there isn’t a single statutory threshold that universally defines part‑time hours. Align your approach with your organisation’s policy and current official guidance. Many employers apply consistent policies so that part‑time staff have access to comparable terms and processes (for example, leave and pay frameworks, pension/benefit eligibility, holiday allocation, training and development opportunities, promotion/transfer criteria, and career‑break options), adjusted as appropriate for contracted hours.

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 typically have rights similar to other workers, such as holiday entitlements and minimum-wage protections. Confirm current thresholds and entitlements using official guidance. Some workers may also be able to take work with other employers.

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 responsibilities such as certain tax-related or pay-related obligations. Confirm the current requirements using official sources. However, it is the agency’s responsibility to ensure that agency workers receive their entitlements under working time regulations.

If an agency worker has been in the same role for a 12-week period, current official guidance indicates they may have access to terms and conditions similar to permanent employees. Check the latest rules for the current approach. 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 risk of misclassification.

Stay aligned 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 help confirm alignment with current official guidance.

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. It is helpful to review current official guidance when preparing worker or employee contracts