When you hire someone, you must fully establish what employment status they’ll legally categorise under.
Employment status relates to what type of work is expected from the new employee. It also highlights what lawful responsibilities you have for them, as an employer.
In this guide, you can learn about employment statuses in Ireland, examples of different types, and how it’s determined under Irish legislation.
What is employment status?
In simple terms, employment status refers to how a person engages with work. Status relates to whether someone is either ‘employed’ or ‘self-employed’.
People are generally categorised into three groups: employee, worker, and self-employed.
Sometimes, it’s quite hard to determine which category people fall into. And if the right status isn’t applied, it could affect wages, rights, and social welfare.
Before finalising any contract ― written or verbally ― it’s crucial all parties understand the status, rights, and legal protections involved.
Different types of employment status in Ireland
There are many different types of employment status, and each comes with their own legal rights and allowances.
Under employment law in Ireland, there’s no legal definition for ‘employed’ and ‘self-employed’. The Code of Practice for Determining Employment Status defines each term by:
- What work is done.
- How the work is completed.
- Whether written or verbal agreements were used.
Employee status
Those with employee status will:
- Be assigned work from an employer.
- Adhere to contract terms, like tasks and hours.
- Receive a fixed wage.
- Pay tax through the PAYE (Pay as You Earn) system.
Part-time employees are held on a similar level to full-time employees. They’re entitled to the same employment rights, which are legally bound.
In some situations, part-time employees will have to build up enough work hours to apply these rights.
Fixed-term employees are contracted for specific jobs where an end date is already set. If someone has continuously worked through fixed-term contracts for a year, they’re protected from unfair dismissal.
You cannot treat them less favourably compared to permanent workers. Fixed-term contracts cannot be continuously renewed. After four years’ service, they will classify as a permanent employee.
Worker status
In Ireland, workers can fall under casual employment status. They’re given employment which is generally free from fixed hours and attendance.
Other worker employment statuses include:
- Seasonal workers
- Young workers
- Agency workers
- Gig workers
Employees generally access more legal rights compared to workers. However, in practice, most businesses will apply these rules across all staff members.
Self-employed status
Those with self-employed status will:
- Have complete control over their business.
- Hold responsibility for financial risks.
- Shape their workforce to their own accord.
- Decide their own workloads and clientele.
- Pay taxes through personal assessments.
How to determine employment status for new candidates
Determining employment status in Ireland should be done during the hiring stages. It falls on you to provide the most suitable one. To do this, follow legal guidance from these statutory bodies:
- Department of Social Protection: Provide correct social welfare, like PRSI (Pay Related Social Insurance).
- Office of Revenue Commissioners: Determine the right tax amount.
- Workplace Relations Commission: Action appropriate employment rights against complaints.
Under Irish law, there are five legal tests used to determine the employment status of new candidates. The tests include:
- Mutilation of obligations: This test determines if an employer is required to offer work and if the person is expected to accept.
- Substitution: This test checks if a person can send someone else to complete a job on their behalf.
- Enterprise test: This test sees whether a person joined the business on their own accord. And if they can profit or suffer losses from their work.
- Integration: This test determines whether the person is an important part of the business.
- Control: This test checks whether the person will control the work entirely from start to finish.
After running the tests, you’ll be able to determine employment status better. And once this is decided, provide appropriate rights and benefits within reason.
Get expert guidance on employment status with Peninsula
Every single person who conducts work for your business should be given employment status. This will reassure them of their legal rights, benefits, and entitlements.
Without establishing this understanding, they could raise a breach of contract claims ― leading to costly penalties and business damage.
Peninsula offers expert guidance on employment status. Our clients get access to 24-hour HR advice, where specialists can help you protect your staff and business simultaneously.
Get in touch today or use our callback form to arrange a more convenient time. Call us on 0800 028 2420
