When is an employee not an employee?

Have you been affected by the compulsory pension schemes for all employees?

Do the potential savings in Employers National Insurance and Pensions contributions appeal to you?

Are you encouraging your workforce to become self-employed?

If you answered yes, you could be incorrectly declaring your workforce as Bona Fide Sub-Contractors (BFSCs) in respect of your insurance.

Both employee and Labour Only Sub Contractor (LOSC) costs need to be taken into account as part of your overall employee payroll figures when calculating your Employers’ Liability premium.

Incorrectly declaring employees or LOSCs as BFSCs could mean that, in the event of an accident, your claim may be rejected. The claimant’s solicitors may argue that BFSCs should have been considered an employee, which could invalidate any potential claim settlement.

Do you know the difference between an employee, Labour Only Sub Contractor (LOSC) and a Bona Fide Sub Contractor (BFSC)?

Labour Only Sub Contractor (LOSC)

  • Payment on an hourly, weekly or monthly basis
  • Able to receive overtime or bonus pay
  • Work a fixed number of hours
  • Use your materials, tools and equipment
  • Work under your supervision

Bona Fide Sub Contractor (BFSC)

  • Payment on a fixed-price contract
  • Decide their own work schedule
  • Decide on how, when and where to do their work
  • Responsible for correcting unsatisfactory work
  • Work without supervision

At Safeguard, we are committed to helping you protect your business from potential risks. To make sure you are not exposed, always check that any BFSCs working with you have arranged their own Liability insurance, and contact our expert advisers to check your Employers’ and Public Liability policies cover you and your workforce correctly.