The form of employment is a distinct set of features associated with the techniques in which work is managed, supervised, paid, and conducted. It is also a primary thing to consider for both employees and employers while moving into cooperation. Therefore, here I gathered six main forms of employment to know about:
1. Full-time permanent employee. A full-time job implies a form of employment where a person works 40 hours a week. However, the exact number and conditions are assigned by each employer individually. Some other factors that influence the full-time work requirements may include the country of residence, type of company, or industry. This form of employment does not have a pre-defined termination date for the employment contract. Moreover, full-time employees have some benefits in terms of being entitled to subsidized healthcare, paid vacation, holidays, sick leave, and other contributions assigned by the government or company.
2. Part-time work is suitable for individuals who are seeking a balance between work and study, family responsibilities, or just can’t afford to take long hours of work for some personal reasons. Part-time employment supposes that the working week doesn’t exceed 30 hours or the number of working hours falls less than 40. The part-time work can be conditionally divided into three categories:
- Substantial part-time with 21–34 hours of work per week;
- Short part-time with 20 hours of working time per week or less;
- Marginal part-time with less than 15 hours of work per week.
In rare cases, part-time type of employment may imply even shorter working hours or no fixed working hours at all. This form of employment is referred to as “on-call work”, and such employees have different contractual structures, often referred to as “zero-hours contracts” in certain countries and industries.
3. Temporary staffing is the form of employment that is common for the project-based type of work. In this case, the workers are usually hired by a recruitment agency to provide work on a short-term basis for other businesses or organizations. The length of contract of a specialist hired under the temporary employment basis may differ. Usually, it ranges from a few days up to several months or even years. Temporary agency workers are paid by the agency, and the same agency is responsible for billing the client for the services.
4. Multi-party employment relationships. This form of employment refers to a partnership in which the worker has an employment relationship with more than one employer at once. Such cooperation is gaining momentum in industries such as construction, where workers are often employed by multiple contractors or subcontractors. In a multi-party employment relationship, the worker may have distinct responsibilities, duties, and benefits with each contractor. Additionally, the specialist may also receive different wages from each employer. Multi-party forms of employment are complex and require a complex management system to ensure that all sides are fulfilling legal requirements concerning a safe working environment and other legal compliances.
5. Dependent contractors. This form of employment is a bit tricky. A dependent contractor has some similarities with a regular employee and an independent contractor. By that, I mean that a dependent contractor can be represented by the worker or some entity, which fully economically depends on the company they work for. Such employment structure is considered self-employed similar to the independent contractor but it only works for one client instead of multiple customer companies. For instance, self-employed real estate agents or taxi drivers are considered to be specialists working on a dependent contractors basis.
6. Independent contractors. This type of relationship stands for a self-employed specialist that provides services for another person or organization under contract but is not categorized as an employee. You may hear independent contractors being called self-employed specialists, freelancers, or in rare cases even consultants. In fact, independent contractors are often getting offers to work for some time to complete specific projects or pieces of work. They are in charge of managing their work schedule, techniques and mechanisms, and are only partially controlled by clients. In this case, their major duty is to provide quality and timely results of work. Also, independent contractors are generally free to work for multiple clients simultaneously.
In the IT industry, software developers often choose to work as independent contractors under B2B agreements. A specialist is hired by a tech company as an external contractor, but in fact is treated as an employee. This model allows for lower tax rates and bigger flexibility for both IT specialists and tech companies. For instance, in Romania software engineers get up to 15% more net income if hired as independent contractors, not regular employees. Following this, employers save as well.
Some other benefits of B2B contracts with IT specialists abroad include:
- Larger talent pool. The B2B contract facilitates the process of hiring specialists in another country due to less bureaucratic inconveniences and expands the talent pool of potential candidates.
- Saving money. As the geography of potential candidates expands, the tech company can come up with a decision to find the independent contractor in a more pleasant economic region, say, with lower average cost of labor and/or favorable taxation.
- Convenient payment. Companies can make the salary payment process straightforward, meaning simply paying an invoice from the specialist and conducting a bank transfer. All other deductions, including taxes, are further managed by the contractor themselves (or a reliable local service provider).
The form of employment is an essential aspect for both employees and employers to keep in mind when getting into working relationships. Each type of employment features certain kinds of benefits and working schedules, and thus it’s crucial for both parties to be aware of these factors prior to cooperation. Ultimately, figuring out the forms of employment can help individuals make thoughtful decisions about their careers. From the employer’s side, it can facilitate the decision-making process of hiring and managing their workforce.