HR · 30 June 2017

Self-employed demand statutory sick pay ahead of any other benefit

Statutory sick pay was ranked "way ahead" of other benefits such as holiday entitlement
Statutory sick pay was ranked “way ahead” of other benefits such as holiday entitlement

Britain’s freelancers and micro business owners have identified statutory sick pay as the workplace benefit they would most value, according to new survey findings released ahead of a government-commissioned review into modern self-employment.

With the review, led by Royal Society of Arts chief Matthew Taylor, set to be published in July 2017, cloud accounting provider FreeAgent and The Freelancer & Contractor Services Association (FCSA) asked 900 self-employed workers across the country which workplace benefits were most important to them.

As a starting point, the latest study predicted over three-quarters of Britain’s 5.2m micro business owners had no method to provide sick pay, maternity or paternity leave or holiday pay for themselves.

Access to statutory sick pay was then cited by respondents “way ahead” of all other benefits in terms of importance.

Business structure was found to be a key divider in demand for traditional benefits. Sole traders were most likely to value statutory sick pay, rating it 8.7 out of ten. Meanwhile, those working through their own limited company only rated it 6.4 out of ten.

Status also defined the way respondents viewed workplace pensions. Sole traders valued auto-enrolment entitlement as 7.3 out of ten, compared to 5.5 from limited company owners.

Commenting on the findings, Ed Molyneux, FreeAgent CEO, raised concerns that the gig economy review could punish micro business owners. He said efforts by policy makers to “level the playing field” between self-employed and regular works were “very unfair” on those who undertake the personal risk of running a small company.

“Ideally, the UK’s millions of freelancers and micro business owners should be able to enjoy the same statutory entitlements as their employed counterparts – especially if they will be expected to pay the same level of tax,” Molyneux said.

The upcoming review is set to recommend major shifts to the way workers are categorised between self and fully employed. On-demand gig economy workers are among its priorities, and likely to see entitlement to statutory benefits boosted.

Molyneux added: “The government needs to acknowledge the tremendous financial risks associated with starting and running your own business and bear this in mind when deciding on its future tax policies.”

Julia Kermode, FCSA chief executive, said the research was conducted to highlight the diversity of self-employment. Kermode suggested there was no “one-size fits all solution” to the varying models of self-employment, while government should target those who are in most need of provision.

“For many people who work for themselves, self-employment is a career choice and those who choose it know that this way of working does not come with statutory benefits.

“However, it is clear from our research that many have not made appropriate provisions to cover benefits that employees receive.”

Read our interview with Matthew Taylor on the future of self-employment in Britain

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Simon Caldwell is deputy editor at Business Advice. He has a BA in politics and communications from the University of Liverpool, and has previously worked as a content editor in local government and the ecommerce industry.

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