The Government is expected to crack down on firms using self-employed workers to avoid auto-enrolment and to avoid paying sickness and maternity benefits.
The Times reports a review commissioned by the Government will report later this year that an increasing number of firms are taking on self-employed workers to replace salaried staff.
Potential employees are being asked to incorporate themselves as sole traders so that companies do not have to contribute to their pension or pay them benefits.
The review is expected to recommend stricter rules around what is genuine self-employment, and firms will not be able to sanction workers classed as self-employed.
It comes after Chancellor Philip Hammond abandoned plans to increase class 4 national insurance contributions a week after the proposals were announced in the Budget.