Did you know you can be a "worker" and still be classified as self-employed? Or have you ever been confused by friends or relatives who work for one company and yet are not

"employed" by that firm? You are not alone - and in fact this has become a key area of concern for the government. A formal review led by Matthew Taylor, Royal Society for the Arts

chief executive and former adviser to Tony Blair, has just reported back after a nine-month investigation and has proposed a whole series of employment law reforms. In particular, it has

set out a series of measures to offer greater security to those employed flexibly in the so-called "gig economy", with the ultimate aim of improving the lot of vulnerable people

morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox. So, what are the various employment statuses? How has the gig economy

changed things? And how would the Taylor review reforms change things if they were put into law? GIG ECONOMY This term describes the modern, flexible working structures characteristic of

companies that came out of Silicon Valley and other tech hubs such as London, including ride-sharing firm Uber and delivery business Deliveroo. Its name relates to the idea that instead of

the commercial relationship existing between company and customer, in these cases firms class themselves as "middle men" between individual contractors and prospective clients.

These contractors then do “gigs” for the clients directly, with the firms taking a commission. So, Uber considers itself a technology firm that has developed an app - and all of its drivers

are classified and paid as self-employed contractors running their own businesses. Critics argue, in the words of the Resolution Foundation think-tank, that in many cases these workers are

not self-employed but simply "disguised workers" who should enjoy more guaranteed rights. SELF-EMPLOYED So how is someone defined as self-employed? This is one of the three main

designations for people in work as defined in employment law, which describes someone who is ultimately in business for themselves. It's important to note, though, that you are not

self-employed just because the company you work for says you are - or even because you sign a contract to that effect. The main principles of self-employment are that you take on financial

risk for your activities, have at least a large degree of self-determination in how you go about your work, and, crucially, that you can work for more than one "client". If you are

truly self-employed you are not entitled to any rights that apply to employees, such as the minimum wage, sick and holiday pay, maternity pay or the ability to sue for wrongful dismissal.

You also pay national insurance at a lower rate of nine per cent, instead of 12 per cent. WORKER This is a designation in employment law - but not in tax law - that sits between employment

and self-employment and that few people seem to know about. Following separate tribunal hearings the status has already awarded to several Uber drivers last year, one rider for courier firm

CitySprint earlier this year and is being demanded by a group of Deliveroo riders awaiting a tribunal hearing verdict. In short, you could be a worker if you have a contract with a specific

firm, which is not a client but rather sets the terms of your work including things like hours, fixed pay rates, locations or working patterns. Unlike properly self-employed contractors,

"workers" are entitled to the minimum wage of £7.50 per hour for over-25s as well as holiday, sick and maternity pay. They are still not entitled to claim for unfair dismissal. How

this relates to taxation is more complicated and is the subject of a test by HMRC, says LexisNexis. The reality is that unless you meet a higher threshold for self-employment - such as

being able to hire and fire staff and having opportunity to increase profit - you will probably be taxed as an employee. EMPLOYED This one is easier: if you work for a firm, doing fixed

hours and following your employers' direction, you're employed. You'll be paid via Pay As You Earn and have taxes deducted at source, paying the higher rate of national

insurance. You can have more than one job concurrently, of course. All employees are entitled to the minimum wage, which, as scandals such as those relating to Sports Direct show, must

include all time spent at the company's discretion - and it cannot be reduced by enforced deductions for things like uniform. You are also entitled to statutory sick, holiday and

maternity pay and, once you've worked for a firm for two years, you are able to claim for unfair dismissal and qualify for redundancy if your job is cut. DEPENDENT CONTRACTOR The Taylor

review set out this new definition, which would replace the current worker status and is designed to preserve the flexibility of the gig economy while guaranteeing greater protection for

those working for these firms. As per the current rules, it would give rights to holiday, sick and maternity pay, but not to claim for unfair dismissal. Taylor wants to see the way this

status is defined clarified, so that it all boils down to "control". That means a simpler test that might ask, say, if the firm sets your rate of pay. If the answer is yes,

you're a dependent contractor and not self-employed. And if you are classed as such, you'll be an employee for tax law so there will be no tax incentive to offer less secure work.

Workers meeting this definition would get 20 per cent more than the minimum wage, but only for peak hours. The rest of the time firms can pay less if they offer "real time"

transparency to contractors to enable them to make an "informed choice". Unions have criticised the review for not scrapping this middle-ground option altogether and for allowing

firms to pay less than the minimum wage some of the time. ZERO-HOURS CONTRACTS Not a designation in law, but a term used to define a form of employment contract that sets low or no fixed

hours, above which staff can be offered more work at the employer's discretion. Such contracts are common in the retail, hospitality and care sectors and are controversial because

workers on them can struggle to get a mortgage and often complain of being asked to work at very short notice with the threat of losing work altogether if they refuse. So, according to

critics, they favour unscrupulous employers and disenfranchise vulnerable employers in low-wage occupations. Taylor pointed out that 68 per cent of people in these jobs say they do not want

more hours and enjoy the flexibility, with one in five in full-time education. In his review he sought to give more protection and force firms to offer a fairer deal, but without closing the

option altogether. Proposals include setting a higher minimum wage for uncontracted hours to encourage firms to guarantee more work - and to allow workers to request a full, fixed contract

once they've been with an employer for 12 months. Again, unions want them banned altogether and have branded the proposed reforms "feeble".