Consultation on employment status reform

21 October 2026

The government has launched a consultation on employment status. If adopted, the proposals would reshape how UK businesses classify their workforce. It would potentially become easier for individuals to be found to be workers, harder for businesses to rely on substitution clauses, and more costly to get status wrong.

Employment status dictates what statutory rights and obligations apply to the relationship between an individual and a company. Determining whether an individual is an employee, a worker or genuinely self-employed can involve much uncertainty and complexity. The consultation proposals seek to address this. The consultation also seeks views on a set of narrower proposals to extend protections to the genuinely self-employed. None of the proposals affect the separate employment status framework for tax.

In the longer term, the government is still contemplating creating a single status of worker, which would remove the current three-tier distinction between employees, workers and the self-employed. No further detail has been published on how this would work in practice, but it would represent a far more fundamental shift than the proposals addressed in this briefing, and is one we will continue to monitor.

This briefing explores the key proposals, the areas of legal uncertainty, and the practical implications.

Download PDF