UK 
United States
Employers and HR have traditionally had a wealth of employment issues to consider. Whether this is to do with changing legislation or employee health, there are many things for the people function to consider. And with Prime Minister Boris Johnson announcing a ‘roadmap’ out of lockdown, that will see restrictions gradually ease, it is possible that more employment issues could crop up going forwards. To keep HR professionals ahead of the curve, Victoria von Wachter, a Barrister at 5 Essex Court, has laid out three employment issues that will likely arise as the UK comes out of the latest lockdown period below.
Read on to find out more.
Employers’ dilemma
For many years workers operating as contractors claimed to be ‘self-employed’ to benefit from the more generous tax regime. However, the Inland Revenue, alive to this situation, cast a very analytical eye on such arrangements. Workers responded by creating Personal Service Companies (PSC) of which they were the sole employee or receiver of dividend. Work givers (the client) would engage with the company and the workers often paid themselves not in wages but in dividends. The situation was of course still the same with many of these workers being ‘employees by stealth’. The IR35 regime was created to remedy this situation. IR35 refers to the off-payroll working rules that aim to ensure that contractors doing work for companies, and the companies themselves, are paying the correct level of tax. The IR35 changes being introduced are to further reduce the effect of people ‘synthetically’ working as though they were self-employed which means the Treasury misses out on income tax and National Insurance contributions from both them and the company employing them.
