The government’s review into employment practices was published this week. How will it impact your business? 

We’ve been waiting with bated breath for Matthew Taylor’s report on Modern Working Practices. The report has noble intentions but we will have to wait and see whether the Government leads the way and takes the recommended steps in relation to implementing the necessary legislation to effect Taylor’s suggestions.

The report is lengthy but here is an overview of some of the key recommendations that may affect your business as retailers.

Dependent contractor – a sophisticated rebrand of “worker”?

The report recommends that there is a rebrand of the term “worker” to “dependent contractor”. Apparently, this is not a term of art and therefore easier to understand for all concerned.

The key factors in determining whether someone is a “dependent contractor” will be the control exercised over them and consideration of whether they are subordinate to the business that engages them.

Taylor recommends that substitution (i.e. the right of an individual to send someone else to do a given job) should no longer be a “get out jail free card” that permits businesses to circumvent “dependent contractor” status and the protections that this will bring.

This re-characterisation (or rebrand for the cynics amongst you) means that more individuals are likely to cross the Rubicon from self-employment to “dependent contractor” status.

It is recommended that “dependent contractors” have broadly the same rights currently afforded to workers, with some tweaks around National Minimum Wage for “piece work” and non-guaranteed hours.

Taxing labour – not status

It is suggested that, for many individuals and businesses, the motivating factor for self-employment is the associated tax advantages.

Taylor recommends narrowing the gap, bringing tax for the self-employed more in line with tax for employees.

At the moment, workers could be employed or self-employed for tax purposes (there being no concept of “worker” in tax legislation), depending on the facts of each assignment. Taylor suggests that “dependent contactors” would all be employees for tax purposes.

It’s good to talk

Taylor suggests that better quality and more open dialogue between business and staff would go a long way to solving some of the disputes that relate to employment status, on the basis that better dialogue between business and staff leads to a more productive working environment with a better sense of well-being.

He may well be right that dialogue and transparency on employment status will assist things.

What does it mean for retailers? Well, needless to say, Taylor’s report is not binding. That said, it is a clear indication of the way the Government views things and confirms the direction of travel in recent cases on employment status.

If the commercials of your business permit, it would be wise to consider the status of any self-employed contractors in the cold light of Taylor’s report.

Even if no formal changes are made immediately, starting a dialogue with your staff, considering issues of minimum wage, and seeking advice on the legal and tax implications will ensure that your business is “Taylor-ready” if and when these recommendations are implemented.