What is employment status?
Employment status refers to the relationship between an employee and employer and the regulations that define it. The most important implications of an individual’s employment status are typically who is responsible for tax deductions and what protections the employee is entitled to.
Related: The Rise of Fractional Employees
What are the most common types of employment status?
While employee/employer relationships evolve, several forms tend to prevail. Here is a look at the most common employment statuses and the pros and cons of each:
Full-time employment
According to Statistics Canada, a full-time employee clocks 30 or more hours each week at their principal job. It is important to note that these required hours can vary based on your province or territory, so be sure to check the regulations in your specific location.
While the entitlements of a full-time employee vary by provincial or territorial legislation, they can include sick leave, paid vacation, and statutory holidays. Benefits such as the Canada Pension Plan, Employment Insurance, and Worker’s Compensation Insurance are mandatory in all regions.
The benefits of hiring a full-time employee include lower turnover rates, greater familiarity with the position and its duties, higher levels of consistency, and a better return on your investment in training. The downside is they usually require steady hours and can increase your payroll expenses.
Part-time employment
If you don’t quite require a full-time team member, you may opt for a part-time hire. Statistics Canada explains that part-time employees are scheduled for less than 30 hours per week at their primary job. Like their full-time counterparts, part-time employees are still offered several protections according to their jurisdiction. For example, Ontario’s Employment Standards Act guarantees all employees the provincial minimum wage, overtime pay, public holidays, a vacation period with pay, and a notice of termination.
Part-time hires can benefit your company by offering a flexible workforce, lowering overall payroll costs and decreasing burnout rates. On the other hand, part-timers can pose scheduling challenges, often have lower levels of commitment and offer less consistency—a trait that can impact customer service.
Temporary employment
Temporary employees are usually hired for a specific period. They are ideal for filling in during someone’s absence or working on a project that has an end date.
Hiring temporary workers can reduce your company’s overall labour expenses, speed up the hiring process, and enable you to tailor a hire to a unique project and skill set. They also provide the opportunity to “test drive” an employee before committing to a permanent hire. Conversely, temporary employees can lead to less cohesiveness among your team and may be expensive to train for the short term.
Seasonal employment
Seasonal employees are temporary hires tasked with working during peak seasons. For example, retail outlets tend to hire extra employees during the Christmas rush. Other industries that frequently hire seasonal employees include food services, hospitality, tourism, fishing, and agriculture.
Hiring seasonal workers makes sense when you wish to fill scheduling gaps during busy times. These employees can be a cost-effective alternative to permanent hires, and you have the option of offering long-term positions to those who show promise. Possible negatives include the cost of training employees for short-term work, lower levels of loyalty, and decreased consistency.
Related: How to Write a Seasonal Associate Job Description Sample
Contract employees
Your organization may wish to hire a contract employee for a specific project and skill set. These employees are often referred to as “freelancers” or “independent contractors.” These self-employed individuals specialize in a specific area, such as graphic design, consulting, writing, social media, accounting, or website creation.
Hiring a freelancer can enable your company to access top talent quickly, adapt to staffing needs with ease, and meet deadlines more efficiently. You also only pay for tangible work completed. If you plan to hire freelancers, you may need to ramp up your online security and institute a way to make global payments.
Leased employees
A staffing firm leases an employee to a business in need of a position filled. This firm pays their wages and looks after the human resource duties associated with this employee while said employee works for your company. They are often brought in to fill temporary vacancies or work on short-term projects.
This option enables your company to fill positions quickly with employees who possess job-specific skills while reducing job posting and hiring expenses. If you are pleased with the employee’s performance, you can hire them permanently. It is important to note that since these employees are not actually employed by your organization, they may be less dedicated to your company than your own staff, and they could fail to mesh fully with your team.
Read more: How Employment and Recruitment Agencies Work
Interns
An intern gains work experience in an entry-level position. They are often students seeking knowledge and skill sets in their field of study. Some of these internships are paid, while some are not. Industries that commonly offer internships include healthcare, engineering, law, journalism, and public relations
An intern can provide support to existing staff, offer a fresh perspective, impart new skills, boost a company’s reputation, and lead to a stellar new hire. Keep in mind that they usually require significant amounts of training and often lack job experience.
The employer/employee relationship can take many forms, and each one serves a particular purpose. By better understanding the many varying employment status types, you can better tailor your future hires to best meet the needs and goals of your organization.
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