Every question you have about your employment status answered

Defining your employment status at work is an important step in expressing what you are worth and what benefits you are entitled to in your unique role at the company.

It is important to know what you will be getting in this new position and what you deserve based on the type of working relationship you have with your employer.

What are the 3 basic employment rights for a worker?

You are owed certain benefits and legal protections depending on where you fall under your employment status. There are typically 3 different types of employment statuses: a worker, an employee, or self-employed.

What kinds of perks are granted to you depending on your level of employment? This is what we’ll be exploring in this piece. Once a working relationship is clearly established, whether through a written or verbal contract, that’s when the real work can begin.

It’s important for the company hiring people to be aware of the type of contract that will best serve the company’s needs. Do you need short term or long term commitment? Can you afford to hire full-time employees considering all of the benefits they are entitled to? Is it best to hire someone who is an independent contractor?

As an employee, it’s also imperative to ask yourself the same type of questions. Do your research. What would you ultimately like to get out of this working relationship? Do you need a quick way to make money, flexible hours, or are you planning to start a family in the next few years and you’re searching for more stability and benefits that will serve your entire family’s needs?

Ask yourself where you want to be in five years and this will illuminate the type of contract that will benefit you best long term considering your lifestyle, core values, and career goals.

Workers are entitled to the following benefits

Workers have the most loosely defined ties to a company they work for.

Usually, workers have a specified arrangement with their boss to perform services. Unfortunately, they are obligated to show up for work when they don’t want to. Paid time off and paid vacations are typically not part of the perks of a gig economy worker.

One other limitation workers face is legally they are not allowed to subcontract their responsibilities to others on the job. Typically these sorts of jobs include seasonal work, freelance contracts, and jobs offered through a temp agency. If you’re searching for flexibility on the job, a worker status with a short contract might be the best option.

What kinds of benefits are workers entitled to under contract if there is one?

By law, companies are required to pay workers the minimum wage and statutory minimum holiday pay. Workers also legally can’t work beyond 48 hours a week unless they specifically request overtime. By law, if workers are part-time they cannot be treated differently or unfairly compared to full-time employees.

Workers are also protected against discriminatory practices or microaggressions experienced on the job or during the hiring process. Scheduled lunch breaks in the middle of shifts longer than 8 hours are also required by law

If you feel like any of your rights are being violated on the job make sure to bring up these blindspots to the HR department first and if you have no luck it might be time to report massive labor violations like unsafe working conditions to the United States Department of Labor.

A safe workplace is a happier one with far less turnover. The less disgruntled employees that leave your business the better. Less turnover will largely benefit companies in the long run as turnover can be a huge time and money waster. It also leaves a blemish on the company’s record and this poor reputation is easily discovered on sites like Glassdoor where former employees can leave honest feedback about their experience on the job.

Employees enjoy the following perks on the job

Being considered an employee at your job grants you access to the most benefits compared to any other working relationship. Employees also have more protection and job security. If your employment status definition is that of an employee the compensation is substantial and you’re allotted the following protections and perks under the umbrella of that specific title.

Employees have the right to sick pay, holiday pay, redundancy compensation, statutory maternity, paternity, adoption, and shared parental leave, (as well as pay), protections against unlawful termination, minimum notice periods, and the right to request a flexible schedule.

Requesting a flexible schedule is allowed legally but keep in mind if you don’t meet the needs of your employer assigned to you via contract when you signed on initially with the company, this may become a problem. Requesting time off should be within reason, due to a family emergency or health problem, because as an employee you are required to meet a minimum amount of hours and output per week.

Be aware of your limitations and what you can feasibly take on with all aspects of your life and core skillset considered. You don’t want to burn out your first year in a challenging industry that isn’t the right fit. Even worse, you don’t want to start a new career unable to take on the challenges required, fall short, and have a blemish on your demonstrated work experience.

Companies must also be mindful of the resources they have to divvy out amongst employees. Businesses should be wary of making the rookie mistake of hiring full-time employees without the budget to properly compensate them for all of their hard work. The following press release explains the importance of having a clear, defined role determined by your employment status.

“The employment status that you choose is going to go a long way towards defining your new relationship with your employee – you need to choose the one that best describes how you are going to work together. Choose the wrong one and you can cause yourself some real problems further down the line. You could commit your company to offer out more employment security than it can really afford, for example – or you could find yourself underhanded at key moments because you aren’t able to rely on your team to be available when you need them.”

Avoid employee dissatisfaction and lawsuits down the line by understanding the legalities involved in employee compensation and protection practices. For example, any business that employs over 50 people is required to provide comprehensive health care coverage through the Affordable Care Act.

Self-employed entrepreneurs have access to the following key advantages

Let’s say you are your own boss, what kind of protections and benefits can you lay claim to in the workforce? I suppose you can always give yourself a day off without requesting one from a higher-up. However, when it comes to starting your own business it’s rare you have much free time or extra money to take a lavish vacation with funds that haven’t already been invested and put aside for the overhead needed to get your business up and running.

One large benefit of having your own company is the flexibility and freedom to make your own schedule and decisions. You call the shots and you set the bar for the amount of work you need to complete each day to see your vision come to fruition with a successful new business model.

One downside is that you don’t have the same type of employment protections workers or employees have. No paid time off, no paid vacations, and no unemployment benefits if your company goes under. Success or failure is in your hands and your hands alone. There is no safety net in case you fail so be sure you have a solid nest egg and business plan before embarking on a risky and often costly endeavor.

Do your market research to ensure your vision or company is a viable one with solid data and statistics that inform how well the industry you’d like to break into is doing currently. You wouldn’t want to invest all of your hard-earned money and time into a dying industry, would you? It doesn’t hurt to take a look at the industries that will experience exponential growth in the next 10 years to ensure the goods and services you’ll be offering will remain in high demand for years to come. Check out some burgeoning industries to research today!

Established companies looking for an impassioned worker on a short term basis for a single project might want to look into hiring a self-employed contractor to help them reach deadlines. This blog covering all issues related to human resources goes into the typical scenario where a small business would find it in their best interest to hire a self-employed freelancer.

“If it’s a short-term project with a clear start and endpoint, then you might find that a freelancer under the ‘self-employed’ employment status is the right choice. If the work your business needs doing is an ongoing long-term requirement, then you would probably benefit more from the stability of a permanent employee.”

The takeaway

All things considered, it behooves both employee and employer to define your employment status from the very beginning. This sets realistic expectations for both of you as your collaborative working relationship continues to grow. It’s important to know your rights and what you are entitled to on the job based on where you fall on the corporate ladder. Continuing to honor this symbiotic working relationship will only improve future new businesses.