Up to 100,000 UK workers could gain entitlement to the national minimum wage and holiday pay under a government crackdown on what Business Secretary Jonathan Reynolds calls "bogus" self-employment.

Reynolds announced the plan at the Labour Party Conference in Liverpool, saying the government will first consult on what he described as "loopholes" in UK employment law. For employers, the move touches contractor classification, onboarding processes and workforce cost models across sectors that rely on self-employed labour.

"Loopholes in our employment laws are being used to define workers as self-employed when they are clearly not, denying them basic employment rights, undercutting businesses who are doing the right thing, and leaving people with the sense that playing by the rules doesn't pay," Reynolds told delegates.

He framed the issue as fairness rather than technical legal reform. "Everyone can see this isn't right. It is a fundamental question of fairness. And conference, I am proud to announce to you today this Labour Government will put an end to it," he said.

"We will close the loopholes, we will stop the most egregious examples of bogus self-employment, and we will level the playing field for business. And in doing so, up to 100,000 more workers will get access to the national minimum wage and holiday pay," Reynolds added.

The government has not yet set a date for the consultation or published draft provisions, meaning employers face a waiting period before knowing the exact scope of any new obligations.

What the consultation may cover

Employment lawyer Rebecca Seeley Harriss outlined three likely areas of reform. She expects the consultation to consider a legal presumption of worker status when an individual brings a tribunal claim, reducing the weight given to "personal service" in status tests — particularly where contractual substitution clauses do not reflect working reality — and additional protections for the genuinely self-employed.

All three could prove consequential. "A presumption of worker status would alter the practical burden in tribunal proceedings. Changing the role of personal service could be more fundamental still," she said. She cautioned, however, that the government will need to provide more clarity on exactly what it means by "bogus self-employment" before the practical impact becomes clear.

A presumption of worker status would shift the evidentiary burden onto employers in tribunal claims, requiring them to prove an individual is genuinely self-employed rather than the claimant proving worker status. For HR teams, that could raise the stakes on how contractor relationships are documented and how closely substitution clauses match day-to-day working arrangements.

Pushback from the contracting sector

Dave Chaplin, CEO of contracting authority ContractorCalculator, warned against reforms that sweep legitimate freelancers into employment status. "Any attempt to crack down on bogus self-employment must not come at the expense of the genuinely self-employed. There is a fundamental difference between disguising an employment relationship and two parties freely choosing to engage on a self-employed basis," he said.

"The government should be targeting genuine abuse, not creating more legislative sludge that makes it harder for freelancers and small businesses to operate. Where an individual genuinely wants to be their own boss and the business genuinely wants to engage them as an independent contractor, the law should respect that choice rather than override it," Chaplin added.

His comments point to the central drafting challenge the consultation will face: distinguishing disguised employment from genuine contractor relationships without adding compliance friction for small businesses and independent professionals.

For employers, the announcement signals an era of heightened scrutiny on worker status. Companies that rely on self-employed contractors may want to audit how those relationships operate in practice — especially where contracts include substitution rights that go unused — ahead of any statutory change. The consultation's outcome will determine both the burden of proof in future tribunal claims and how much room remains for genuine self-employment in the UK's flexible labour market.