Employment status refers to the employment relationship between an employer and an employee. It determines what is required from the employer in terms of rights and employment protection.
What Are the Types of Employment Statuses?
Employment status determines the rights guaranteed to an individual. It can differ depending on the regulations of the country. Three types of employment status are typically recognized: worker, employee, and self-employed.
Workers such as agency workers, seasonal workers, or casual workers have a basic status with fewer rights guaranteed by the law. For example, their work hours can fluctuate throughout the year.
Employees work under the conditions of a contract of employment. They have extensive protected rights. For example, they can have several fringe benefits and have a statutory redundancy pay.
Self-employed workers are essentially their own employer, and therefore do not benefit from many rights normally related to normal employment by an organization. For example, they do not benefit from paid holiday or sick days.
Which Employment Status Applies?
Depending on their needs, organizations may elect to retain the services of different parties with varying conditions. The employment status of a person therefore depends on their relationship with the hiring party. For example, a seasonal business may choose to exclusively hire workers as they do not have enough work to hire employees all year round.
Hiring workers provides more flexibility whereas hiring employees provides stability.
