The Self-Employment Matrix


Who is and who isn’t self-employed? With a tribunal verdict seemingly arriving every other day, this is certainly a contentious issue. For IPSE, this is a problem – we would prefer to see more certainty for individuals and hirers and fewer cases in the courts.

That is why we designed our ‘Self-Employment Matrix’ as part of our response to last year’s Taylor Review. The rationale being that all parties will be better off for having greater clarity over what self-employment looks like. For individuals, it will help prevent exploitation and also better support those who want to be self-employed understand what steps they need to take to ensure they are genuinely in business on their own account. Similarly, companies need certainty about how they should approach their relationship with people they wish to engage on a self-employed basis.

Drilling down into the detail of working practices, our matrix is grouped into four categories which reflect the reality of self-employment:

  • Autonomy;
  • Control of process and working environment;
  • Business risk;
  • Level of integration in client business.

Based on case law and our assessment of what genuine self-employment looks like, there are various factors within each category that tease out whether the contract, and the working practices underpinning it, should be considered self-employment. Each factor is weighted to reflect how strong a pointer it is towards genuine self-employment. The scores for each factor are added together, with the final score resulting in one of four conclusions: self-employed, not self-employed, likely to be self-employed, or unlikely to be self-employed.

This is about how much power the self-employed individual genuinely has within the relationship. Is their client obliged to provide work and are they obliged to do it? Do they have the unfettered right to provide a substitute and have they indeed used a substitute? Are they able to work with other clients?

  • Lack of Mutuality of Obligation (MoO) (10 points)
  • Right to substitution (5 points)
  • Use of a substitute (10 points)
  • Lack of exclusivity (5 points)

Control of process and working environment
On a day-to-day basis, who is in control? Is your client able to change what tasks you are working on and how it is done? Do you have a say about the hours you work?

  • Control of tasks (15)
  • Control of method (10)
  • Control of hours (5)

Business Risk
Are you genuinely running a business, taking into account the risks that it entails? Do you have to seek new work? Are you paid on a project by project basis? Do you regularly set or negotiate your own rate of pay?

  • Pay per job/task (10)
  • Two or more clients (5)
  • Entrepreneurial activity (5)
  • Rate of pay (5)

Level of integration in client business
Do you represent yourself or your client in the course of doing your work? Are you forced to wear a uniform? Do you use your own equipment and tools?

  • Representation (5)
  • Equipment and tools (5)

Scoring and next steps
65+ = Self-employed
50-64 = Likely to be self-employed
35-49 = Unlikely to be self-employed
<36 = Not self-employed

It is unlikely that any engagement is likely to meet all the criteria, but the genuinely self-employed will meet most. IPSE believes that the autonomy an individual possesses and how much control they exhibit on a day-to-day basis is absolutely central to being self-employed. That is why these categories are heavily weighted in our matrix. The taking of business risk and the extent to which you are integrated into a client’s business are important too, but in our view do not get to the heart of what being self-employed really means in the same way.

IPSE hopes that our matrix is made available and signposted by government as a resource for the self-employed and those who engage the self-employed. It enables individuals and organisations to quickly understand where they stand – for engagements that fall into the “grey area”, it will be immediately clear which factors either the individual or client will need to change in order for the engagement to be considered genuine self-employment.

Following the recent Employment Status Consultation, we also see a role for our Self-Employment Matrix as government considers codifying the employment status tests. We think bringing the employment status tests into statute could well provide more clarity.

Government should be careful though not to simply replicate the current confusion around the case law. IPSE believes policymakers should go back to a “first principles” basis and consider which factors really make up genuine self-employment – using IPSE’s Self-Employment Matrix as a framework.

Meet the author

Jordan Marshall

Policy Development Manager

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