The Institute of Directors has called the Government's Good Work plan the "biggest shake-up of employment law in generations".
Business groups have broadly welcomed the new measures to improve workers' rights. Ben Willmott, head of public policy at the CIPDsaid: "Improving clarity and transparency of people's contractual terms and conditions from day one can help to ensure that people's rights are respected in the workplace and reduce abuses."
Julia Kermode, chief executive of The Freelancer & Contractor Services Association (FCSA), said: "The proposal to ensure that all workers receive a clear list of day-one rights is very positive, this is a relatively simple change that should alleviate any confusion and improve awareness of rights for otherwise potentially exploited workers."
However, Jane Gratton, head of business environment at the British Chambers of Commerce (BCC), warned that "the Government must be careful not to unduly burden firms with further costs and bureaucracy, which could price people out of jobs."
The issue of how to tax the self-employed has divided opinion, however. Both the Federation of Small Businesses (FSB) and freelancer body IPSE have welcomed the Government's pledge to shelve plans to raise National Insurance Contributions for the self-employed.
Chris Bryce, IPSE ceo, said: "We were particularly pleased that of Taylor's 53 recommendations, the one the Government has decided not to act on was his call for a move towards parity between employee and self-employed NICs. The self-employed currently pay a lower level of NICs because , by providing flexible expertise for businesses across the UK, they take on much higher levels of business risk than their employed counterparts."
However, Stephen Martin, director general of the Institute of Directors (IoD), said: "The lack of action on tax reform is a wasted opportunity. The different tax treatment of the employed and self-employed has been a driving force behind the rise in self-employment in recent years, but tax treatment should not determine a person's choice of employment status."
And Julia Kermode of the FCSA said: "It makes sense to use the opportunity to align employment and tax statuses, the current mismatch creates confusion and can drive behaviour such as engaging self-employed people in order to minimise employment NICs."
The announcement of a new extended consultation on employment status has had widespread support. IPSE's Chris Bryce said: "The world of self-employment has been shrouded in confusion for some time because of the lack of clarity about employment status. While 'employee' and 'worker' status are both written into law, there is still no legal definition of self-employment."
Mike Cherry, FSB national chairman, said: "We look forward to working with the Government to ensure that the genuinely self-employed receive the protections and rights they're due. Of course we need to stamp out false self-employment. But what we definitely can't have is the genuinely self-employed disadvantaged in the process."