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Freelance support is vital – but you can’t flout the rules

by on January 8, 2018 in Latest News, Lead Article, News you can use, Nuggets

Freelance support is vital – but you can’t flout the rules

 Author: Aliya Vigor-Robertson, Co-Founder at JourneyHR

Marketing agencies often bring on extra support during any busy period.

For many, this has become standard practice over the years, as it’s helpful to have a reliable band of freelancers on-hand to cover staff holidays or simply lighten the load. Change, however, may be afoot.

We’ve seen a number of developments in this area during 2017, including Uber’s employment law case and the Matthew Taylor report. As a result, agencies that rely on freelancers could face some challenges this year. So, as the new year starts, what do agencies need to know about using freelance support?

What Uber means for self-employment

Let’s start at the beginning. Last year, Uber faced legal action over whether its drivers should be considered as legal workers of the business. Even though Uber’s drivers are technically self-employed, some have successfully claimed that they should be entitled to the same benefits as regular employees, such as paid parental leave and annual leave, since they work exclusively for Uber.

In theory, freelancers who work for just one agency could make a similar argument. After all, many agencies have a favourite freelancer who doesn’t tend to accept work from anyone else when they’re engaged in a project. Starting to sound familiar? If so, don’t worry; there’s no need to panic.

The laws around this have been thrown into the air this year, but there are steps that agencies can take to protect themselves from any problems down the line. First, agencies need to familiarise themselves with the rules in this area to make sure they are protecting both parties involved.

The impact for agencies

Unfortunately, that may be easier said than done, as there has been no all-encompassing ruling on this issue. Some cases have allowed individuals to gain full worker status and have access to the rights that come with it, while others have not.

A number of different factors will ultimately determine whether HMRC views an individual as self-employed or a full-time member of staff, including how many days/hours they work in a week and whether they are paid for holidays or sick leave. In some cases, HMRC may also want to review the contractual agreement between the agency and the freelancer to make sure that the latter is complying with certain conditions, such as using their own equipment, being able to provide a substitute to perform their work if needed, having the option to refuse work, and needing to have their own insurance.

Hiring in help

These rules may sound intimidating, but they don’t need to be; agencies just need to be prepared. From the moment an agency decides to use a freelancer, the process needs to  differ from hiring an employee. For a start, the agency will need to clarify the nature of the worker’s self-employed status. They should also take this opportunity to explicitly inform freelancers that they will not be entitled to employee benefits.

All of these bases need to be covered at the start. It’s no longer enough to ‘promise’ that these discussions have happened; HR, Finance and the individual hiring the freelancer must work together to make sure these conversations are formalised and fully documented.

Campaign based co-workers

One of the most common reasons that agencies use freelancers is for large project-based campaigns or launches. As these projects are often months in the making, many agencies can unintentionally breach the rights of the self-employed.

When considering external help, businesses need to think carefully about how long the project is expected to continue. It’s not unheard of for campaigns to take 9-12 months to complete, if not longer, and hiring freelancers to support this work could be risky.

In some cases, if the relationship continues for the full length of the campaign, the freelancer will effectively be working the hours of a temporary employee, without any of the benefits. To address this issue, agencies need to regularly review their list of ‘go-to’ freelancers to make sure that they’re working for other companies as well. Or, if better suited, draw them up a temporary contract of employment.

Are freelancers still an option?

The freelance lifestyle will always be appealing to some, and this is unlikely to change in 2018.  After all, freelance workers have the ability to control their own hours, choose how much time is spent working, and on what tasks.

However, agencies will need to be conscious of the ever-blurring line between self-employment and full-time worker status, while they wait for the government to deliver a more comprehensive ruling on the subject. Until these rules are clarified, agencies should start the New Year by reviewing their freelance agreements and checking whether they comply with the spirit of the law.

 

 

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