In 2018, an external report by law firm Eversheds Sutherland, commissioned by RTÉ, revealed that up to 157 RTÉ employees could have been wrongly classified as self-employed, meaning they lost out on employment benefits. In 2021, the Public Accounts Committee (PAC) were told by the RTE that 81 freelance and self-employed contractors were offered staff positions following an analysis of the Eversheds report by the Revenue Commissioners.
This week, we have heard again about this matter on the public airwaves, and it is a good reminder to employers to keep ‘their house in order’.
Proposed Penalties for Employers
Earlier this year, a draft Oireachtas Committee report recommended that penalties for employers who intentionally misclassify workers as self-employed, resulting in the loss of PRSI and employment rights entitlements should be explored by the Department of Social Protection.
The report also recommended exclusion of such employers from government public procurement contracts, targeted inspections, and anti-victimisation legislation for workers caught up in so-called bogus self-employment.
Backdated PRSI contributions to be paid by Employer
Employers should note that if a worker is reclassified as an employee, the employer is liable to pay the backdated PRSI contributions which they previously avoided.
Employee v Self-Employed Status
The Code of Practice for Determining Self-Employment Status is the reference document to review, along with case law.
Usually it is clear whether an individual is employed or self-employed, however, the code of practice should be scrutinised carefully if in doubt, and err on the side of caution.
When looking at the criteria, you must consider the working conditions and the employment as a whole. The main question will always be whether they work ‘as a person in business on their own account’. This will help decide if the person is a free agent with economic independence from an employer.
Determinations on employment v self-employment
Workers can seek a determination of their PRSI/employment status classification through the Scope division of the Department of Social Protection, but it can take a few years to be completed.