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UK law must back freelance rights to be paid on time

In the FT today, it was reported that late payments kill an estimated 50,000 small businesses a year. The Federation of Small Businesses has estimated that late payments cost the UK economy £2.5bn each year to 15% of the working population.

In New York, steps have already been taken to curb this problem; freelancers have the right to full payment within a reasonable period, with penalties enforced by the authorities. A warning phone call to errant companies from the city’s consumer affairs department is often enough to secure payment.

It is not only a legal issue in the UK, but a cultural one. Clients tend to hold on for money for no other reason than the fact that they can, and well respected captains of industry encourage paying freelancers late as a way of improving cash flow.

While freelancers can help themselves by staying on top of new accounting changes and through prompt invoicing, they must get authorities onside, and they must remember that there is strength in numbers. Banding together to challenge late paying clients will only support their claim for fair treatment.

But something needs to change in order to protect freelancers and small business owners.

More than a quarter of UK workers choosing alternative ways of working over full-time jobs

Over a third (37%) of the UK’s workforce are choosing alternative methods over full-time employment. Statistics come from ManpowerGroup Solutions’ latest Candidate Preferences Survey, that surveyed over 700 UK workers.

The survey reveals that the UK workers’ preferences for alternative work structures include: part-time work (22%), contract-based work (6%), project-based work (3%), gig economy work (2%), temporary (1%) and seasonal work (1%).

Jill Bassett, who is the Workforce Solutions Director for ManpowerGroup Solutions, commented:

“Alternative employment models are growing in popularity and so employers must ensure that they understand this dynamic to create roles and opportunities that promote a happier, more engaged workforce. With more than one billion young people entering the global jobs market in the next decade, UK employers must ensure that they are in touch with all their workers’ needs.

Record level high in employed and self-employed

32.7m people were in work from December to February – resulting in an increase of 457,000 in the space of a year.

Women made up 80% of the 179,000 increase in the latter part of last year. This is down to more mothers, women over 50 and students wanting to enter the labour force.

Factory workers, who had previously struggled to win pay rises, received on average an increase of 2% in February, which is just above inflation.

Yet, Matt Hughes from the ONS comments on the pay rise saying: “Earnings have now been growing ahead of inflation for over a year, but in real terms, wage levels have not yet returned to their pre-downturn peak.”

Total pay, including bonuses, now averaged £494 a week, compared with £525 in February 2008 – the year of the economic crash.

Although there were fears that Brexit would stop companies hiring, research from the ONS found there were 852,000 unfilled job vacancies in March, close to a record high.

The employment minister Alok Sharma says, “The UK jobs market continues to go from strength to strength, proving the underlying resilience of the British economy

“By increasing the living wage and personal tax allowance for 2019, this Government is putting more money in people’s pocket, benefiting millions of families across the country.”

IPSE shows that despite economic and political uncertainty the growing self-employed sector is showing no signs of slowing down

New statistics from the ONS reveal that the self-employed sector has grown the self-employed sector has grown by 76,000 when compared to the figures from the same time last year.

IPSE’s Economic Policy Adviser, Ryan Barnett, says: “The self-employed sector is one of the UK’s biggest competitive advantages, contributing no less than £275bn to the economy each year.

“This data shows this sector is going from strength to strength because the freedom and flexibility of this way of working are still very attractive to people across the UK.

“What’s more, remote working opportunities, shared work spaces and new technology continue to open this way of working up to more and more people.

“To maintain and develop this vital sector, the government should give it the support it needs. Above all, it should not add more confusion to it with the hugely damaging proposed changes to IR35 next April.”

June ultimatum for the BBC

MPs on the PAC have issued a June deadline by which the BBC must sort our it’s ‘life-changing’ treatment towards PSCs and put steps in place in order to “get a better grip of its management of its freelancer workforce.”

Within the next 60 days, the BBC must explain in writing how they will change hiring arrangements with Personal Service Company for current and future workers, making contracts “simpler, clearer and more consistent.”

They must outline how they plan to deal with the potential loss of employment benefits to individuals who were on staff contracts but were essentially “forced” by the BBC to become PSC.

They must also explain how they have helped the huge number of benefit-stripped people that they have assessed, according to the Public Accounts Committee.

HMRC lose another IR35 case, this time to BBC star

In another high profile IR35 case, HMRC has yet again “failed to understand the labyrinth of their own self-employed laws”.

Adams, once a panellist on ITV’s Loose Women, appealed against a challenge to her self-employed status while presenting BBC Radio Scotland’s The Kaye Adams Programme during the 2015/16 and 2016/17 tax years. The First-Tier Tribunal tax chamber was satisfied that Adams’ plentiful work outside the BBC indicated that she was calling the shots for her career, not an employer.

IR35 legislation for off-payroll working shifts responsibility for determining tax status from the contractor to the business that hired them, and many IT workers fall under it. The rules were changed in 2017 to mean contractors could no longer self-certify for their public sector work, and those reforms are due to be rolled into the private sector next year.

HMRC are considering their next steps, including an appeal. However, this is the fifth case they’ve lost out of the last six. Are they planning on appealing all of these cases?

New EU rights for Gig economy workers

Gig economy workers, like Uber drivers and Deliveroo couriers, have new employment rights that were implemented across the European Union on Tuesday.

The European Parliament said these laws have been put in place to protect “the most vulnerable employees on atypical contracts and in non-standard jobs”, and will not cover “genuinely self-employed” workers.

The 3 million people that these laws are estimated to effect, will receive minimum rights for freelancer workers, such as compensation for cancelled work and more regular hours.

Gig-economy workers will also have to be told what pay they will receive on day one of their work. They will also be allowed to work for other companies and refuse projects asked of them that occur outside of normal working hours.

Spanish MEP Enrique Calvet Chambon, from the ALDE liberal group, said: “From now on no employer will be able to abuse the flexibility in the labour market.

“All workers who have been in limbo will now be granted minimum rights thanks to this directive.”

The EU’s member states will have three years to implement these new laws. Similar rules will be heading to the UK soon, following up from The Taylor Review.

‘No rationale’ for patchy protections under freelance solicitors, says watchdog

Consumer watchdogs have attacked the Solicitors Regulation Authority for changing its policy on freelance solicitors and leaving clients in the dark about what protection they can expect.

The Solicitors Regulation Authority (SRA) is the regulatory body for solicitors in England and Wales.

It is responsible for regulating the professional conduct of more than 125,000 solicitors and other authorised individuals at more than 11,000 firms, as well as those working in-house at private and public sector organisations.

The Legal Services Consumer Panel said the regulator had reversed its decision to ensure all solicitors operating as freelancers under new rule changes would be required to have indemnity insurance.

In the SRA’s final submission to the Legal Services Board, which must approve any changes, this requirement is altered to affect just freelance solicitors offering reserved activities.

In a letter to the LSB, panel chair Sarah Chambers says such ‘patchy’ cover will lower consumer protection and exacerbate confusion. ‘There is simply no rationale for this inconsistent treatment of unreserved legal activities by solicitors depending on whether they undertake reserved activities,’ says Chambers.  

The panel echoes concerns raised earlier this month by the Law Society, which said the LSB should insist on insurance requirements for all freelance solicitors. The SRA may dismiss the profession’s concerns as protecting the status quo, but it is harder to use this defence against a group looking out for consumers’ interests.

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