The Fine Line: Managing Freelancers Without Crossing HR Boundaries

In today's dynamic business landscape, freelancers have become essential contributors to many organisations. Their specialised skills and flexible arrangements offer tremendous value, but working with freelancers also presents unique challenges from an HR perspective. Perhaps the most significant challenge is understanding where employer authority ends and freelancer independence begins.

Freelance Means Free: Understanding the Fundamental Relationship

The term "freelancer" contains a vital clue to the nature of the relationship—these professionals are fundamentally free in how they operate. As self-employed individuals, freelancers maintain control over critical aspects of their work life that employees typically do not:

• When they work: Freelancers set their own hours and schedules

• Where they work: They choose their workspace, whether that's a home office, café, or co-working space

• How they complete tasks: While the deliverables must meet agreed standards, the process is typically at the freelancer's discretion

• Who else they work with: Unlike employees, freelancers can (and often do) maintain multiple client relationships simultaneously

This independence is not merely a preference—it's a defining characteristic of the freelance relationship that has significant legal and tax implications in the UK.

The Exclusivity Equation: You Get What You Pay For

One common misunderstanding arises around exclusivity. Many businesses would prefer their freelancers don't work with competitors or would like to dictate specific working hours or methods. However, this fundamental principle applies: if you want exclusivity, you must pay for it.

Requiring a freelancer to:

• Work set hours

• Work exclusively for your business

• Follow your company's internal processes

• Work from your premises

• Use your equipment exclusively

• 
  

...begins to resemble an employment relationship rather than a freelance arrangement. In the UK, this can trigger what HMRC calls "disguised employment," leading to potential complications with IR35 regulations and unwanted tax liabilities.

When true exclusivity is necessary, consider these alternatives:

1. Proper employment: If you need full control, consider bringing the person on as a proper employee

2. Premium freelance rates: Compensate significantly higher for exclusivity clauses

3. Limited-term exclusivity: Pay for exclusivity only during specific projects or timeframes

4. Non-compete agreements: Focused specifically on protecting intellectual property rather than controlling working methods

   
   

Setting Boundaries: What You Can and Cannot Dictate

What You Can Rightfully Specify:

• Deliverables and outcomes: Clear expectations about what will be produced

• Quality standards: The benchmarks that work must meet

• Deadlines: When deliverables must be completed

• Confidentiality: Protection of sensitive information

• Brand guidelines: How your brand should be represented in their work

• Reporting structure: Who they communicate with in your organisation

  
  

What You Should Avoid Controlling:

• Working hours: Dictating specific times they must work

• Working methods: Requiring specific processes not essential to outcomes

• Client relationships: Preventing them from working with others

• Employment benefits: Treating them the same as employees

• Holiday approvals: Requiring permission for time off

  
  

Class Time vs. Studio Scheduling: A Pilates Studio Example

For Pilates studios working with freelance instructors, this distinction becomes particularly important. While a studio can establish available time slots when space and equipment are available, requiring instructors to:

• Teach at specific times rather than offering them available slots

• Prohibit teaching at other studios

• Follow standardised teaching methodologies not essential to safety

• Require attendance at unpaid staff meetings

...may jeopardise the freelance relationship and create potential employment classification issues.

A better approach is offering incentives for desired behaviours—perhaps priority scheduling or higher rates for instructors who choose to meet certain additional requirements.

Best Practices for Managing Freelance Relationships

1. Clear contracts: Outline deliverables, deadlines, and rates without overstepping into employment territory

2. Outcome-focused management: Focus on results rather than how work gets done

3. Appropriate communication: Treat freelancers as business partners rather than subordinates

4. Fair compensation: Pay rates that reflect both the work and any additional restrictions

5. Regular reviews: Periodically evaluate whether the freelance relationship remains appropriate or if employment might be better

6. Documentation: Maintain records of the freelance relationship's key characteristics

   
   

At our organisation, we work closely with HR's award-nominated Talent Tent to ensure our clients are doing all the right things with their instructors. This partnership allows us to provide up-to-date guidance that balances business needs with proper classification and fair treatment of freelance professionals. Their expertise in navigating the complexities of freelance relationships has proven invaluable in helping studios maintain compliant, positive relationships with their instructors.

When to Consider Employment Instead

Sometimes, what you truly need is an employee rather than a freelancer. Consider employment when:

• You need someone to work set hours on a regular basis

• You require exclusivity or significant control over working methods

• The relationship is expected to be long-term and stable

• Having them integrated within your team culture is essential

• The cost of premium freelance rates for exclusivity exceeds employment costs

  
  

Conclusion: Respecting the Freelance Relationship

Working effectively with freelancers requires respecting the fundamental nature of the relationship. The independence that defines freelancing isn't just a preference—it's a legal distinction with significant implications.

By understanding where your authority as a client ends and the freelancer's independence begins, you can build productive, compliant relationships that benefit both parties. Remember that true control comes with the responsibilities of employment, while freelance relationships thrive on mutual respect, clear expectations, and appropriate boundaries.

If you need the control that comes with employment, be prepared to offer the security and benefits that should accompany it. And if you choose to work with freelancers, respect the freedom that makes their contributions so valuable.

This blog provides general information only and should not be considered legal advice. For specific guidance on employment classification and freelance relationships, consult with a qualified legal professional familiar with UK employment law.

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