COMPANIES trying to save money by offering self-employment may be doing wrong by their employees, according to Wyre Forest Citizens’ Advice (CAB).

The advice service is warning that people who are falsely self-employed when they should be properly employed can be missing out on benefits such as holiday pay, National Insurance credits for their pensions, and sick pay.

The CAB has conducted research and published a report Neither One Thing Nor the Other, which shows that as many as 10 per cent of the people who work for themselves could be bogusly self-employed, some 460,000 people nationwide.

Tests of self-employment include whether 'employees' are provided with uniform, if they have to clock in and out with hours set by the ‘employer’, and, if tax is deducted and each case is different; but unscrupulous employers can force people to be self-employed to save costs when they should employ them and provide valid employment contracts with the protection that they afford.

Kate Bennett, Wyre Forest CAB manager, said: “Self-employment is an increasingly attractive option as you can be your own boss but where the reality is that you are not your own boss and you ought to be employed, it is easy to under-estimate how much you lose out. You can lose £1,200 in holiday pay, sick pay, maternity leave and maternity pay, compassionate leave, and auto-enrolment for the employer’s pension scheme.

“Self-employment is right for some people, but where an employer gives themselves a competitive advantage by not treating people properly, other employers doing the right thing lose out. It is also easy to under-estimate both the financial and non-financial costs. Loss of pension can amount to many thousands of pounds as bad employers do not make pension contributions on behalf of their employees and non-financial losses include the lack of a grievance procedure and worst of all, potential threats to the health and safety of the self-employed with no risk assessments carried out. People need to be very careful and contact CAB for help.”