No Rights Employee
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Legislation

In April 2017 the government brought in legislation which created a new class of worker. Sometimes called "inside-IR35 contractors" or "employed for tax purposes", these workers are in fact No Rights Employees (NREs).

NREs are on the payroll, operate on zero-hours contracts but do not count towards "employees" or headcount. Unlike full-time employees or zero-hours workers, they receive no employment benefits, no holiday or sick pay, no maternity/paternity, and no employment protections or redundancy. They can be hired and fired at will, with no reason given.

Unlike Contractors, NREs pay tax at source (via payroll), cannot claim any expenses not available to employees and do not attract attention from HMRC or the unions. Also unlike contractors, NREs do not need complex "status determinations" and do not need special working conditions - they can be treated like employees or contractors as necessary.

NREs are government and HMRC approved.

How NREs Can Help Your Business

Do you have, or worry about, workers like these:

  • Often sickly and using lots of support services
  • Poor timekeeping and attendance
  • Sometimes idle because workload fluctuates due to projects or order variations
  • Possibly a poor cultural fit, or have different values to you
  • Young women who may need maternity pay and cover in the future
  • Family men who may need paternity or shared parental leave
  • Gender equality issues
  • "Risky" hires who may not work as hard as hoped or may need too much help/training/support

NREs can help in all these situations and more!

NREs are not entitled to sick or holiday pay, maternity/paternity and are not entitled to use any employee support services. They're on zero-hours contracts, so if they aren't working they don't get paid, and if there's no work to do, they can be sent home without paying them for the rest of the day. They can be terminated without notice or reason, so poor performance or differences of attitude, personality or working style can be addressed quickly.

NREs do not count as headcount, and so do not feature in gender equality calculations, meaning its possible to have the right workers without worrying about diversity.

Worker status can also be used as a motivational tool - top performers can be promoted into full time employment.

Remember: Executives and top management can retain company car, gym and golf club memberships as a company perk, without fear of perceived unfairness because they're only available to employees - NREs are not employees.

Compare Employees, NREs and Contractors

No Rights Employee (NRE) Employee Contractor
On Payroll Yes Yes No
Headcount No Yes No
Zero-hours Yes Can be Yes
Holiday Pay No Yes No
Sickness Pay No Yes No
Maternity No Yes No
Redundancy No Yes No
Terminate without reason Yes No Yes
Don't pay if no work Yes If on zero-hours Yes
Union-friendly Yes Yes No
Eligible for employee perks No Yes No
Government and HMRC approved Yes Yes No

Act Now!

Your competitors are hiring NREs and getting the benefits right now. Act fast:

  • Talk to your recruitment or HR specialists about NREs
  • Get some NREs - either hire them to fill your vacancies or convert existing employees to NREs

Many recruitment and HR partners are not fully up-to-speed on NREs yet so you may need to help them understand your business needs and the solution.

You can hire NREs right now, and you can convert employees (either full-time or zero-hours) to NREs right now too. You can't convert employees to contractors without attracting HMRC attention, but NREs are government and HMRC approved, so you can convert right away!

No Rights Employees - the future of workers in your business.