In recent times, the Government has taken steps to intensify its efforts to combat “false self-employment”. False self-employment is an employment relationship where it appears as if a person is self-employed but in reality they are actually a direct employee of a business or corporate structure.

The Department of Employment Affairs and Social Protection can provide a determination on an individual’s employment status. This means the Department can decide whether a person is actually an employee or self-employed.
Where a finding of false self-employment is made, the Department will amend the individual’s PRSI contribution record accordingly. They will also liaise with the Office of Revenue Commissioners. This may result in Revenue pursuing back payments of PRSI and other financial penalties from the employer.

In determining whether a person is self-employed or an employee, the Department will look at the reality of the work and work relationship between a person and the company they work for. What the parties call their relationship is not what matters; it is the reality of the work relationship that matters. The Department will take into account other criteria such as how much control the company has over the individual, how integrated the individual is into the business and how the individual is paid, for example is it a fixed weekly rate, is it per task, etc.

There is currently no legislation regulating false self-employment in Ireland. Two Private Members Bills are currently at the first and second stages of the legislative process, the Prohibition of Bogus Self-Employment Bill 2018 and Protection of Employment (Measures to Counter False Self-Employment) Bill 2018. It may be the case that assessment of employment status is ultimately addressed in the Employment (Miscellaneous Provisions) Bill 2017, which is currently at Report stage in the Dáil. Companies and businesses who engage individuals on a self-employed basis should take steps to ensure that their work practices are appropriate and that such practices will be regarded as being so in the event of an inspection.

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