Do Sub-Contractors Have Employment Rights?

Do Sub-Contractors Rights exist? Neathouse Partners explain the legal employment rights for sub-contractors outside a company.


James Rowland

Commercial Director James leads Account Management, Sales and Marketing at Neathouse Partners.


15 August 2018


11 July 2024
1 min read

What rights an individual has under the law will depend on their employment status.

Self-employed contractors are people who are in business solely for themselves who are neither an employee nor a worker.

Self-employed subcontractors are afforded little protection in law.


Subcontractors have no statutory employment rights such as:

  • Paid annual leave;
  • Statutory sick pay;
  • Maternity, paternity, adoption or shared parental leave including any statutory payments.

However, subcontractors are protected from unlawful discrimination if they have a protected characteristic under the Equality Act 2010.

This means that they cannot be discriminated against on the grounds of:

Many companies choose to use sub-contractors as they provide a business flexibility and no statutory obligations.

Companies do not have to pay National Insurance contributions or Income tax under the PAYE scheme, meaning that the contractors are responsible for paying their own income tax.

Additionally, employers are unlikely to be vicariously liable for acts committed by a sub-contractor while completing work for you, but they will be liable for acts committed by an employee.

It may also be the case that sub-contractors will have their own insurance policies to cover accidents/injuries at work, whereas an employee will be covered by their employer’s insurance policy.


Before hiring contractors, there are some key factors that should be considered:

  • Contractors may often be working on more than one contract at a time, which may mean they are not able to give your particular job their full attention;
  • You will not have the same amount of control over a subcontractor as you would an employee, meaning that they have a greater degree of flexibility to choose which jobs they want to do.

Getting a person’s employment status right is crucial, as it could have serious implications legally and tax wise for a company.

Ensuring that both parties understand the terms and conditions of their relationship from the outset will save any confusion arising further on down the line.

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