NA108-Employment Status Determination Policy

Registration Number: {{org_field_registration_no}}

Employment Status Determination Policy

1. Purpose

The purpose of this policy is to outline how {{org_field_name}} determines, records, and manages the employment status of all staff engaged to deliver temporary healthcare staffing services. This policy is vital to ensuring that the employment status of Registered Nurses (RNs), Healthcare Assistants (HCAs), and other temporary workers is correctly assessed, documented, and managed in line with the latest legislation, case law, and HMRC guidance. It is also essential to provide transparency for clients, workers, and regulators, including the Care Quality Commission (CQC), and to avoid the misclassification of employment status which could result in non-compliance with tax, employment, or regulatory duties. This policy explains how the director(s) of {{org_field_name}} will apply the correct legal framework to each engagement and ensure that workers are fully informed about the terms of their engagement and the associated rights and obligations.

2. Scope

This policy applies to:

All individuals engaged by {{org_field_name}} as temporary workers, including Registered Nurses, Healthcare Assistants, and any other healthcare staff.
All directors and administrative staff involved in recruitment, contracting, and payroll functions.
All client organisations and stakeholders who need assurance of lawful employment practices.

The policy applies to:

Zero-hours contract workers.
Bank staff.
Flexible temporary workers.
Self-employed individuals (in very limited circumstances, where lawfully applicable).

3. Related Policies

Recruitment Policy
Pre-Employment Checks Policy (including DBS & References)
Temporary Staffing Handbook
Staff Contract and Terms Policy
Right to Work and Immigration Compliance Policy
Training and Development Policy
Payroll and Remuneration Policy

4. Legal and Regulatory Framework

This policy complies with:

The Employment Rights Act 1996
The Health and Social Care Act 2008 (Regulated Activities) Regulations 2014
The Agency Workers Regulations 2010
The Working Time Regulations 1998 (Amended 2005)
The Equality Act 2010
HMRC’s Employment Status for Tax (IR35) Framework
The Good Work Plan (BEIS, 2018)
Case law including Autoclenz Ltd v Belcher and others [2011] UKSC 41

5. Principles of Employment Status Determination

All staff engaged by {{org_field_name}} will have their employment status determined before any work is offered. Employment status impacts:

Statutory employment rights (e.g., holiday pay, sick pay, protection against unfair dismissal).
Tax and National Insurance Contributions (NICs) responsibilities.
Eligibility for Working Time Regulations protections.
Responsibility for pension auto-enrolment.

6. Categories of Status Used by {{org_field_name}}

The agency recognises the following lawful status categories:

6.1 Worker (Zero-Hours)

This is the default status for all agency-supplied RNs, HCAs, and temporary staff. These workers:

Have no guarantee of regular work (casual engagement).
Are not obliged to accept shifts offered.
Have the right to statutory holiday pay (5.6 weeks pro-rata).
Are entitled to rest breaks and Working Time protections.
Must be paid at least the National Minimum Wage / National Living Wage.
Are covered by the Agency Workers Regulations 2010 after 12 weeks in the same role with the same client.

6.2 Employee (Permanent Staff)

This applies only to head office staff (e.g., administrators or directors where applicable) who have continuous employment rights. This status is rare within {{org_field_name}} as operational staff are typically bank or zero-hours workers.

6.3 Self-Employed (Exception Only)

{{org_field_name}} does not routinely engage self-employed healthcare workers due to the control, direction, and integration required for agency placements, which generally disqualify workers from genuinely self-employed status under employment and tax law. Exceptions must be authorised by the director(s) and supported by legal advice.

7. Determining Employment Status

The director(s) will determine status using:

The written contract.
The reality of the working relationship (control, mutuality of obligation, integration, financial risk).
The HMRC Check Employment Status for Tax (CEST) tool when appropriate.
Legal advice when required.

Status determinations will be:

Recorded in the worker’s file.
Communicated clearly to the worker.
Reviewed if material changes occur (e.g., extended placements, change of contractual terms).

8. Zero-Hours Worker Arrangements

Zero-hours contracts used by {{org_field_name}}:

Allow workers to accept or decline work.
Contain no exclusivity clauses, in line with the Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015.
Entitle workers to statutory employment rights.
Do not confer full employee status unless the relationship changes substantially.

8.1 Agency Workers Regulations (AWR) Compliance

Temporary workers will:

Gain parity of basic employment terms (pay, working hours, annual leave) after completing 12 continuous weeks in the same role with the same client.
Retain their worker status but benefit from improved terms under AWR.
Be monitored by the director(s) to ensure AWR rights are applied correctly.

9. Communication with Workers

All workers will:

Receive a written statement of terms on or before the first day of work.
Be clearly informed of their employment status.
Be advised of the rights associated with their status.
Be offered a copy of {{org_field_name}}’s Temporary Staffing Handbook.

Any changes in status or contract terms will be communicated in writing.

10. IR35 and Off-Payroll Working Rules

IR35 applies to self-employed individuals engaged via personal service companies (PSCs). {{org_field_name}} will:

Not routinely engage PSCs.
Ensure any proposed PSC engagement is subject to formal status determination using the HMRC CEST tool.
Maintain documentation of determinations.
Apply PAYE where applicable if HMRC guidance requires it.

11. Director(s) Responsibilities

As {{org_field_name}} does not have a Registered Manager, the director(s) will:

Be responsible for employment status determination for every worker.
Keep updated with changes to relevant employment and tax law.
Review status determinations periodically or when engagement arrangements change.
Provide guidance to administrative staff on contracts and pay arrangements.
Maintain accurate records of status assessments and justifications.

The director(s) will also:

Liaise with accountants and legal advisers where necessary.
Cooperate with HMRC or other regulatory bodies in the event of an inspection.

12. Disputes Regarding Employment Status

If a worker disagrees with their determined employment status:

They may raise the matter with the director(s) for reconsideration.
A formal written response will be issued.
If unresolved, the worker may use the agency’s Complaints or Grievance Procedure.

13. Compliance and Risk Management

Incorrect classification of workers could result in:

Financial penalties from HMRC.
Breach of employment rights and associated claims.
Reputational damage.

To prevent this:

The director(s) will conduct regular audits of employment status determinations.
Documentation will be maintained to demonstrate reasonable steps taken to assess status correctly.
Training will be provided to all administrative personnel involved in contracts and payroll.

14. Equality, Diversity, and Inclusion

Employment status determinations will:

Be made solely based on the nature of the working relationship, not personal characteristics.
Comply fully with the Equality Act 2010.
Avoid disadvantaging any protected group.

{{org_field_name}} will make reasonable adjustments for workers with disabilities when determining arrangements.

15. Documentation and Record Keeping

The director(s) will maintain:

Employment status assessment records.
Contracts and written particulars of employment.
Training records.
Documentation relating to AWR compliance.
PAYE and payroll records linked to employment status.

Records will be kept securely in accordance with the Data Protection Act 2018 (GDPR).

16. Training

All directors and administrative staff responsible for recruitment, contracts, or payroll will receive:

Induction training on employment status.
Updates when legislation or case law changes.
Access to expert advice where complex status determinations arise.

17. Review and Quality Assurance

The director(s) will:

Review this policy annually or earlier if changes to law or guidance occur.
Conduct regular audits of staff files to ensure employment status has been correctly determined.
Consult with external experts as required.
Record audit findings and implement action plans where necessary.

18. Policy Review

This policy will be reviewed annually by the director(s) of {{org_field_name}}, or earlier if:

Relevant legislation, case law, or HMRC guidance changes.
Findings from audits or inspections indicate improvements are needed.
The agency’s operational model changes significantly.

Responsible Person: {{org_field_registered_manager_first_name}} {{org_field_registered_manager_last_name}}
Reviewed on: {{last_update_date}}
Next Review Date: {{next_review_date}}
Copyright © {{current_year}} – {{org_field_name}}. All rights reserved.