Is Freelancing just a disguised Zero Hours Contract?

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Small businesses are under increasing pressure to find ways to balance the need to hire staff and the need to stay profitable.

One of the simplest ways to achieve this, where a full time hire can not be justified, is to make sure they only pay for staff when they are needed.

This flexible way to manage a business’ wage bill has created a market for both on-demand freelancers and staff with zero hours contracts - people whose desire for flexibility in their working lives suit the business’ staffing requirements.

If you are considering your career options and think flexibility is an important factor when deciding the right job, you need to understand the differences between freelancing and zero hours contracts, says Jonny Dunning, CEO of weliketowork.com.

“Freelancing and Zero Hours Contracts are completely different. They may appear similar because of the degree of flexibility they offer you, but from an employment status and tax perspective, they are worlds apart”.

As a freelancer, you are typically self-employed and offer your services under a ‘contract for services’. It means you are not ‘employed’ by any company or business you work with.

Being self-employed comes with a range of benefits such as you have full control over when, where and how you work, but it also means you are not entitled to employment benefits like sick or holiday pay.

You will also need to manage your own tax and national insurance contributions.

By contrast, a zero hours contract is simply an employment contract that does not guarantee a minimum number of regular hours each week.

Dianne Lambdin, HR Consultant and Employment Law specialist confirms: “A zero hours contract, just like any other employment contract, gives the individual ‘employee status’ that comes with a range of employment rights and responsibilities.”

Lambdin continues: “As an employee on a zero hours contract, you are expected to work at a specific place and during specific hours. As a freelancer, you have the ability to set your own time and place of work.

“An employee has rights to holiday pay, maternity and paternity rights and also redundancy payments. A freelancer does not have these rights.”

Freelancing and zero hours contracts are both flexible career options but knowing the difference is important.

The Office of National Statistics shows in 2015, there were 800,000 people on zero hours contracts in 2015. IPSE, the body representing freelancers, says there were 1.9 million people freelancing in the UK in 2015.

As skilled workers look to freelancing to enjoy the flexibility of location and working hours, Dunning believes more businesses will need to follow the trend of hiring freelancers.

“For a long time, small businesses owners have seen freelancers as way of getting almost anything done. Using platforms like freelance.jobstoday.co.uk, it’s easy to find a freelancer to manage a website, run your social media, take care of you bookkeeping or even handle HR policy.

“It’s now becoming the norm for larger businesses to outsource to freelancers as well. This means freelancing is now a real career option for people to earn a fair wage for doing good work”.

For more information about becoming a freelancer or hiring top freelance professionals in the UK, visit freelance.jobstoday.co.uk