By Philip Harman & Sara Meyer
|Published 15 October 2026
On 14 October 2026, the government published a consultation on proposals to reform employment status and strengthen protections for self-employed individuals. The consultation forms part of the government's wider "Make Work Pay" agenda and aims to address perceived problems with the current framework, which the government describes as complex, difficult to enforce, and vulnerable to abuse through "bogus self-employment".
The consultation focuses on two principal proposals to reform worker status:
It also seeks views on a range of new protections for genuinely self-employed individuals.
Importantly, the proposals relate only to employment and worker status for employment rights purposes. The consultation paper makes clear that it is not concerned with the separate framework that applies to employment status for tax purposes.
The government states that creating a single worker status remains a longer-term objective. However, it is not proposing such a change at this stage.
The current legal framework includes three categories of employment status, namely:
Under the current law, a limb (b) worker is an individual engaged under a contract which requires them to perform work personally for another party, who is not a client or customer of their own profession or business. This can include many casual workers who do not meet the legal test to be a full employee.
The government considers that the current framework can be difficult to navigate and that the way limb (b) worker status is defined has enabled some employers to classify individuals as self-employed despite the fact that the ‘employer’ still exercises significant control over how those individuals perform their work. As a result, such individuals are deprived of the rights that attach to worker status, such as holiday pay, the national minimum wage, and whistleblower protection.
Over the years, the central focus of the legal test for both employee status and worker status has increasingly turned on whether or not the individual is required to provide their work personally.
It is a fundamental requirement for both employee and worker status that the individual must have to do their work personally. If in fact the individual has a genuine and wide-ranging right to delegate or subcontract their work to another person of their choice (commonly referred to as the right to ‘substitute’) then, by definition, they do not need to provide personal service and cannot be either an employee or a worker.
This has long been a controversial issue. Some commentators argue that this distinction is far too legalistic and frequently does not reflect the reality of the situation. The Employment Tribunals already scrutinise such arrangements to assess whether they are genuine.
The consultation's central proposal is to reform the limb (b) worker test to reduce the importance of the requirement for personal service.
The government is concerned that under the current law a broad contractual right for an individual to send a substitute to perform work in their place may prevent that individual from satisfying the personal service requirement for worker status, even where the employer who has engaged their services exercises substantial control over the working relationship.
The consultation paper therefore proposes to elevate the role of "control" within the worker status test. Instead of asking only whether an individual provides personal service, tribunals would have to consider whether the individual personally performs the work and/or is subject to a significant level of direction or control by the employer.
Under this approach, a person would not automatically be excluded from worker status simply because they have a genuine right of substitution. Where a significant degree of control exists, the tribunal would also have to consider the wider circumstances of the relationship.
The consultation notes that businesses may transfer some control, cost, and risk to the individual, e.g. where a courier company requires drivers to use their own vehicle, submit invoices, and arrange cover if they can't complete a shift. It asks which aspects of control should carry most weight, suggesting that the ability to set or negotiate pay may be an important indicator when distinguishing between genuine self-employment and worker status.
Alternative options under consideration include:
The second key proposal is to introduce a statutory presumption of worker status.
Currently, the burden of proof is on the individual bringing a claim to establish that they have worker status. The proposal would reverse that position so that, in cases concerning rights that depend on worker status, the employer defending the claim would have to demonstrate that the individual is not a worker and is therefore not eligible for the rights in question.
The government envisages the change applying to rights associated with limb (b) worker status, such as holiday pay and pension rights, but not to rights that are dependent on full employee status, such as unfair dismissal and redundancy pay claims. Importantly, the consultation paper confirms that the presumption would apply only to the question of worker status itself, i.e. whether the individual is entitled to the rights claimed. As regards whether the relevant rights had been infringed (e.g. whether an employer had failed to pay holiday pay), the burden and standard of proof would remain unchanged.
The consultation also proposes stronger consequences for employers who repeatedly fail to recognise the correct employment status of their workforce. Repeated misclassification could become an aggravating factor allowing tribunals to impose additional financial penalties where similar status disputes arise after an earlier ruling against the employer.
The government is seeking views on how the FWA could support compliance with employment status rules. In particular, it suggests that the FWA could use its powers to bring tribunal proceedings on workers' behalf to pursue cases involving suspected bogus self-employment where individual workers may be reluctant or unable to bring claims themselves.
The consultation asks whether "limb (b) worker" should be renamed because the current terminology is considered difficult for employers and workers to understand. It does not put forward an alternative name but asks respondents to the consultation for suggestions.
The consultation also proposes developing a non-binding online employment status assessment tool, similar to HMRC's CEST tool for tax purposes, to help employers and individuals assess likely employment status, and asks whether individuals and employers would find this helpful.
Alongside employment status reform, the consultation paper proposes various measures intended to support genuinely self-employed individuals.
Right to a written statement
The government is seeking views on introducing a new right for self-employed individuals to receive a written statement setting out key contractual information, such as:
The consultation asks whether the right should apply to all self-employed people or only certain categories, and whether it should be subject to thresholds such as a minimum engagement period or contract value. It would apply where an individual supplies services to businesses, but not ordinarily to arrangements with private individuals, such as a homeowner engaging a window cleaner.
Protection from blacklisting
Blacklisting involves using information about trade union membership or activities to discriminate in recruitment or treatment, including by withholding work or dismissing an individual. Protection from blacklisting is set to be strengthened under the Employment Rights Act 2025 (see our ERA 2025 tracker for details).
Although the existing framework does not expressly cover the self-employed, there are some restrictions, e.g. a prohibition on refusing to deal with a supplier on the grounds of union membership. The consultation asks whether the blacklisting protections should be extended to cover more self-employed individuals and whether any widening of the limb (b) worker definition should be reflected in blacklisting legislation.
Health and safety protection
The consultation proposes extending to the self-employed the right to protection from detriment where an individual takes steps to protect themself or others from serious and imminent workplace danger. It also asks whether a wider range of self-employed trade union members should be permitted to act as workplace health and safety representatives.
If implemented, these proposals could represent one of the most significant reforms of employment status in recent years.
Reducing the importance of personal service and placing greater emphasis on control would increase the risk that individuals currently treated as self-employed could be found to have worker status, particularly in sectors that rely heavily on contingent labour and substitution clauses, such as hospitality, logistics, construction, and parts of the gig economy.
A presumption of worker status would materially alter litigation risk by shifting the burden onto employers to justify self-employed classifications. Combined with the possibility of enhanced penalties for repeated misclassification and potential FWA enforcement action, this may prompt employers proactively to review their arrangements and potentially reduce their use of self-employed contractors.
The consultation closes on 8 January 2027, and it is likely to be some time before any of these proposals take effect. Employers that engage workers and self-employed contractors are encouraged to respond to the consultation to ensure that their experience and views are taken into account in the government's plans.
