NMWM04090 - Status: issues to consider when investigating self-employment

Where an employer maintains that a person is self-employed (NMWM05060) and not a worker (and therefore outside the scope of National Minimum Wage legislation) it is necessary to investigate the status of the potential worker to determine whether they fall within the definition of a worker according to the National Minimum Wage Act 1998.

Factors which might indicate self-employment include:

• A high degree of financial risk for the individual (i.e. he could make a profit or suffer financial loss; for example if the job is not completed satisfactorily or not on time).
• The individual provides materials for the job and uses his own equipment or tools
• The individual can supply a substitute to do the job
• The individual can decide how and when to do the job
• Whether the individual has to correct mistakes at his own expense and in his own time
• Whether the individual is in business on his own account and does work for other employers and customers