Working with Freelancers, do you understand your responsibilities?

When I talk to the majority of my clients the subject of Freelancers is regularly a topic for discussion. The reason for this is within the Audio Visual and Events Industry they are commonly used as a source of labour and understanding your responsibility towards them is key. Many clients believe that they fall into the same category as a Bona Fide Sub-Contractor and therefore they have little responsibility towards them. There is a big difference between taxation law and employment law and the following article will help you determine the difference between the two.

It’s okay they have their own insurance

The one constant message that I always hear when I talk to my clients about correctly insuring Freelancers is “it’s okay because they have their own insurance”. However, if a Freelancer is working for you, he will usually be regarded as your employee on that day and having their own insurance may not make a difference.

Why does it matter?

Because of their temporary employee status, you will have the same duty of care towards him as you would towards your own employees. Your Health & Safety Policy and Risk Assessments therefore need to take this into consideration. If a Freelancer is injured on site, they will usually have a claim against your Employer’s Liability Insurance and therefore their wages need to be declared to your insurer on the same basis as employees. If they have not been correctly disclosed, it could invalidate your insurance.

Get yourself out of the grey with our helpful checklist

To help you understand for insurance purposes the status of the sub-contractors we have the following guide. This will help you determine whether a worker is a Freelancer or Bona Fide Sub-Contractor.

Freelancers Will Usually Bona Fide Subcontractors Will Usually
Be paid by the hour, week, or month. Agree to do a job for a fixed price regardless of how long the job may take.
Receive overtime pay or bonus payment. Correct unsatisfactory work in their own time and at their own expense.
Only supply their own small hand tools. Provide or hire in the main items of equipment they need to do their job, not just the small tools.
Always have to do the work themselves. Hire someone to do the work or engage helpers at their own expense.
Be told by the principal contractor at any time what to do, where to carry out the work or when and how to do it. Within an overall deadline be able to decide what work to do, how and when to do the work and where to provide the services.
Be moved from task to task by the principal contractor.
Work a set number of hours. Have a contract of service as opposed to a contract of employment.
Work for a number of different people other than the principal.
Pay the cost of all materials or supplies required for the work without being reimbursed (excluding minor items and consumables).
Risk their own money if they bid for a job and the bid is too low, they have to bear the additional cost themselves.
Hold their own public liability insurance in their own name.

Please note the above checklist is only a guide to correctly covering Freelancers and should you require expert advice please contact Luker Rowe.

Lewis Blythe is an account manager at Luker Rowe Insurance Brokers