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I'm a freelancer and regularly work more hours than I invoice for. Should I charge the same when I work less?

This Is Money logo This Is Money 24/01/2020 Will Kirkman For Thisismoney.co.uk

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I work 10 days a month for a marketing agency. I'm employed on a freelance basis so I invoice the agency at the end of the month. 

I'm taking a two week skiing holiday in February. Realistically, I probably won't make up the time in February but I often work in excess of 10 days a month at other times of the year. 

Should I reduce my invoice for February or just bill as normal? And what are my holiday rights more generally as a freelancer? 

Will Kirkman of This is Money replies: The answer to your question depends entirely on your employment status. Are you an employee, a self-employed contractor, a 'worker'? What do all these terms mean, and how do they affect your holiday entitlement?

Though you say you're a freelancer, technically 'freelance' has no legal meaning. You can be a freelancer while also being an employee or a contractor.  

This is confusing, but it's important to know the difference. If you're an employee, you're entitled to 5.6 weeks of paid holiday, on top of things like sick pay and maternity leave. 

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However if you're a 'self-employed contractor', you're not entitled to any of this, and even if you work more than the required hours, you shouldn't invoice for a full month's work if you're going away on holiday.  

That is, of course, unless you want to risk it and hope no-one notices. But do so at your own peril!  

So what's the difference? Are you employed or a self-employed contractor and what is a 'worker'?    

We asked Kathryn Dooks of Kemp Little for her thoughts. 

Kathryn Dooks, a partner in the employment team at law firm Kemp Little, replies:

This distinction can be a difficult one to draw but it's an important one, as it also affects matters such as your status for tax purposes and whether you are entitled to other employment rights such as the right to bring an unfair dismissal claim, to redundancy pay, sick pay, the national minimum wage and maternity/paternity benefits. 

a person wearing glasses and a black shirt: Kathryn Dooks of law firm Kemp Little © Provided by This Is Money Kathryn Dooks of law firm Kemp Little

In very basic terms, someone is an employee if:

The legal test for employment status also considers a range of other factors, such as whether you are 'integrated' into the company, for example if the company undertakes HR procedures such as appraisals and disciplinaries.

Also, whether you bear any financial risk in fulfilling the contract and whether you have a number of other clients so that you are genuinely 'in business on your own account'. 

Weighing these factors can be tricky so it is best to take legal advice on your specific circumstances.

'Workers' are a special category of individuals who don't have full employment rights but who are given certain minimum protections by statute (holiday pay, sick pay and minimum wage being the main ones).

The term 'freelance' doesn't have any legal meaning and it is possible for a freelancer to be an employee/'worker' or a genuine self-employed contractor. 

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You say that you often work in excess of 10 days a month at other times of the year. In light of this, it might be possible to appeal to the agency to receive some additional pay for these extra hours worked. 

They may feel morally obliged to pay you for additional work undertaken. This will depend on the terms of your contract – if you are self-employed and your contract is clear that you will only be paid for 10 days work per month, the agency is likely to take the view that you are delivering the work at your own risk and in the manner determined by you / in a way which is within your control, so they are unlikely to pay you extra. 

However, if you are a freelance employee, you may well be able to persuade them to pay you for additional hours worked in excess of the 10 days, especially if you regularly go the extra mile. 

I would suggest you try to have an honest and open discussion with the agency about this.

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