Government targets bogus self-employment affecting 900,000

The UK government has launched a consultation on tackling bogus self-employment, with an estimated 900,000 people potentially missing out on employment rights because businesses wrongly classify them as self-employed. The exercise opened on 14 October and will examine access to protections including the National Minimum Wage and holiday pay.

The proposals, set out by GOV.UK Business, form part of the government’s Plan to Make Work Pay. They also include targeted protections for people who genuinely work for themselves, rather than only addressing those whose employment status is disputed.

What happened

Ministers are seeking views on how to stop businesses using self-employed labels to avoid statutory responsibilities when the working relationship is, in practice, that of a worker. The consultation concerns employment status for employment rights; it contains no proposals to change tax status or tax frameworks.

Parcel couriers, delivery drivers, hairdressers and gig economy workers are among those the government identifies as potentially benefiting. The announcement does not establish that everyone working in those occupations has been misclassified.

For genuinely self-employed people, the consultation proposes a right to a written statement about the individual contracts they enter into. It also proposes extending protections against blacklisting.

These are proposals for consultation, not an announcement that new entitlements have already taken effect. For wrongly classified workers, the stated aim includes making existing rights easier to access.

The background

The estimate of 900,000 people at risk comes from external research cited in the announcement, Low Pay Britain 2025. It describes the potential scale of bogus self-employment, rather than a confirmed count of people who will receive additional protections.

The central distinction is between the description a business gives an arrangement and how that arrangement operates day to day. The government says some people described as self-employed are nevertheless treated as workers, leaving them without access to rights that should already apply.

Employment status is a separate issue from the right-to-work rules extending to subcontractors, another compliance development affecting businesses that use labour outside their direct workforce.

What people are saying

Business Secretary Jonathan Reynolds argues that misclassification harms compliant employers as well as the people working under those arrangements. His position is that businesses avoiding employment obligations can undercut competitors that meet them.

Reynolds also says reform should preserve the independence and flexibility of genuine self-employment. The government is therefore seeking to address misuse without treating all self-employed arrangements as a problem.

The focus on flexibility is also relevant to the separate debate over non-compete restrictions and the potential use of garden leave. Those proposals concern restrictions on staff moving jobs, rather than the employment-status questions covered here.

What happens next

The consultation runs for 12 weeks and closes on 8 January. Businesses, workers, trade unions, representative bodies for the self-employed and other interested parties are invited to submit their views through the government’s consultation service.

Ministers specifically want evidence on how to prevent bogus self-employment while protecting and improving rights for the genuinely self-employed. The announcement gives no implementation date for reforms following the consultation.