Revision of the International Classification of Status in

Revision of the International Classification of Status in Employment Meeting of the UN Expert Group on Statistical Classifications New York, 6 – 8 September 2017 David Hunter, International Labour Office ILO Department of Statistics

The International Classification of Status in Employment (ICSE-93) • Adopted through a resolution of the Fifteenth International Conference of Labour Statisticians (ICLS) in January 1993 Ø The current international standard for statistics on the employment relationship • Classifies jobs (in employment) with respect to the type of explicit or implicit contract of employment between the job holder and the economic unit in which he or she is employed v Main purposes Ø To provide a model for the development of national classifications for statistics on status in employment; and Ø To provide the basis for the production of internationally comparable statistics on the topic. Department of Statistics

ICSE-93 Substantive Groups Paid employment jobs • 1. Employees Department of Statistics Self-employment jobs • 2. Employers • 3. Own-account workers • 4. Members of producers’ cooperatives • 5. Contributing family workers • 6. Workers not classifiable by status

Main uses of statistics classified by status in employment • Analysis of the nature of the economic risk and authority experienced by workers • Strength of attachment of the worker to the employer and the job Ø Potential indicator of precarious employment situations • Input to statistics on the socio-economic status of persons and households • Explanatory variable in social statistics • Studying the relationship between economic cycles and employment in higher risk, less secure, or precarious working situations Ø Do those who lose jobs in paid employment engage in various forms of self employment Ø Contributing family workers as hidden unemployed • Impact of self-employment and entrepreneurialism on employment and economic growth Ø Government policies related to development and job creation • The provision of data as an input national accounts

Reasons for revision • Categories do not provide sufficient information to adequately monitor changes in employment arrangements taking place in many countries Ø aim to increase flexibility in the labour market Ø increasing uncertainty about the boundary between self-employment and paid employment Ø policy concerns about non-standard forms of employment Ø increased use of ‘dependent’ contractors, short-term and zero hours contracts v Need for statistical information to monitor the impact of these arrangements • Not enough detail to monitor various non-standard forms of employment. • Many issues remained unresolved at 15 th ICLS Ø Optional categories and treatment of specific groups to be decided at national level • Need for guidance on data collection • 19 th ICLS Resolution concerning statistics of work, employment an labour underutilization • Department of Statistics Strong consensus at the 19 th ICLS on the need to revise ICSE-93

Overview of revision process ü Review of the national practices during 2012 -13 ü Discussion paper on the need for revision of ICSE-93 presented to the 19 th ICLS Ø Mandate for revision • Proposed to replace of the existing classification with a suite of standards for statistics on the work relationship Ø status in employment classification to be complemented by a series of supporting variables dealing with various aspects of working arrangements • New standards to be presented to the 20 th ICLS in 2018 in the form of a draft resolution for discussion, amendment, and ultimate adoption Department of Statistics

Development and consideration of proposals Working group to support the ILO • Relatively informal • Includes users and producers of both economic and labour statistics • Representatives from countries, organizations, workers and employers • Meetings and documentation mainly in English only • Online discussion platform • Provide expert advice and technical input to ILO • Assist with the development and testing of proposals • Review first draft resolution for 20 th ICLS • Regional consultations (2016 and 2017) • Testing from 2016 to 2018 Tripartite meetings of experts in February 2018 • Review draft resolution in English, French and Spanish Department of Statistics

• Outline of proposed new standards for statistics on the work relatonship Conceptual framework for statistics on the work relationship – defines the key concepts, variables and classification schemes to be included in the standards • Classification of Status in Employment with alternative hierarchies – a relatively detailed set of categories on the basis of • the type of authority that the worker exercises over the economic unit in which he/she works and • the type of economic risk to which the worker is exposed – Alternative hierarchies based on authority and economic risk • Classification of Status at Work – Extension of the classification of Status in Employment to cover all forms of work, including own-use production work, volunteer work and unpaid trainee work, as well as employment. • A set of cross-cutting variables – More detailed information on the degree of stability and permanence of the work – Definitions and categories for types of arrangement that cut across several ILO Department of Statistics 8 status categories

More detailed categories for status in employment § Sub-categories for employees to allow the identification of employees with non-standard employment arrangements a) Permanent employees b) Fixed-term employees c) Casual and short-term employees § Separate categories for owner-operators of corporations Ø statistics on employment by institutional sector, wages and income, labour market characteristics and work place relations, as well as for input to the national accounts. § Separate category for Dependent contractors § Provide labour to others but have contractual arrangements similar to self-employment OR § Own and operate a business but do not have full control or authority over their work v Suppression of separate category for Members of producers’ ILO Department of Statistics 9

Dependent Contractors Workers employed for profit who are dependent for • • access to the market, determination of the price for the goods or services produced, raw materials or capital items, or organization of the work, on another economic unit that directly benefits from the work performed by the contractor – Their work may be organized or supervised by another economic unit as a client, or as an entity that mediates access to clients. – They have an arrangement for the delivery of goods or services to a separate entity (of the nature of a commercial contract); – The economic units on which they depend may be market or nonmarket units and include corporations, governments and non-profit institutions. • actual working arrangements or conditions may closely resemble those of employees ILO Department of Statistics 10

Statistics on the work relationship • Statistics on the work relationship are concerned with – (a) the relationships between persons who work and the economic units in which or for which the work is performed, and – (b) the contractual or other conditions in which the work is performed. • Relate to all forms of work defined by 19 th ICLS, including – – – own-use production work, employment, unpaid trainee work, volunteer work other forms of work, • 19 th ICLS Resolution concerning statistics of work, employment and labour underutilization, defines work as ILO Department of Statistics any activity performed by persons of any sex and age to 11

Economic units • The concept of economic unit used in the framework is aligned with that defined in the System of National Accounts (SNA 2008) which distinguishes between: – market units (i. e. corporations, quasi-corporations and household unincorporated market enterprises); – non-market units (i. e. government and non-profit institutions serving households); and – households that produce goods or services for own final use (domestic households). ILO Department of Statistics 12

Units of analysis/classification Statistics on work relationships refer primarily to characteristics of jobs or work activities in particular economic units. A job or work activity is defined in the 19 th ICLS resolution as a set of tasks and duties performed, or meant to be performed, by one person for a single economic unit. • The term job is used in reference to employment. • This statistical unit, when relating to own-use production work, unpaid trainee work, and volunteer work is referred to as work activity. A person may therefore have as many work relationships as he or she has jobs or work activities in economic units. ILO Department of Statistics 13

Proposed refinements to the definition of job A job or work activity is defined as a set of tasks and duties performed, or meant to be performed, by one person for a single economic unit: • The term job is used in reference to employment. This statistical unit, when relating to own-use production work, unpaid trainee work, and volunteer work is referred to as work activity. • Persons may have one or several jobs. In cases of multiple job-holding, the main job is that with the longest hours usually worked, as defined in the international statistical standards on working time. • Those employed as independent workers will have as many jobs as the economic units they own or co-own, irrespective of the number of clients served. • When a worker in employment for profit is dependent for access to the market, determination of the price of the goods or services produced, raw materials or capital items, on another economic unit that directly benefits from the work performed by the worker, the set of tasks should be considered to be performed for the economic unit on which the worker is dependent. The worker therefore has a separate job for each such economic unit on which she or he is dependent. • Separate work activities are defined when a person is engaged in both own-use production of goods and own-use production of services for the same household. ’ ILO Department of Statistics 14

Classification criteria • The framework uses two aspects of the work relationship as criteria to differentiate categories of jobs and work activities according to status. – type of authority that the worker is able to exercise in relation to the work performed and – the type of economic risk to which the worker is exposed. ILO Department of Statistics 15

Independent and dependent workers Independent workers • control the activities of the economic units in which they work, either entirely independently or in partnership with others. • make the most important decisions about the activities of the economic unit and the organization of their work. • are not supervised by other workers • are not dependent on a single other economic unit or person for access to the market, raw materials or capital items. • may work on their own account or ILO Department of Statistics in partnership with other Dependent workers – do not have complete authority or control over the economic unit in which or for which they work. include: – – – Dependent contractors Employees, Contributing Family Workers 16

Employment for pay or for profit • Workers are classified as employed for pay or employed for profit based primarily on the nature of the remuneration for a particular job. v Work activities in forms of work other than employment may also be exposed to varying degrees of economic risk, but this concept is of less relevance to the determination of specific groups of workers in these forms of work. • The aspects of the nature of the remuneration taken into consideration include whether or not: – the work is performed for profit (and therefore also entails the risk of loss); – a wage or salary is received or expected; – the worker is paid for the time worked or for the goods or services produced. ILO Department of Statistics 17

Classification of Status in Employment • Nine detailed categories that can be aggregated according to two alternative hierarchies • The first hierarchy is based on the type authority – Dichotomy between dependent workers and independent workers. • The second hierarchy is based on economic risk – dichotomy between employment for pay and employment for profit. – analogous to the traditional distinction between paid employment and self-employment. ILO Department of Statistics 18

Classification of status based on type of authority/dependency Independent workers Dependent workers Employers • Employers in corporations Employers in household market enterprises Employees • Permanent employees • Fixed-term employees • Casual and short-term employees Own-account workers • Owner-operators of corporations without employees • Own-account workers in household market enterprises Department of Statistics Dependent contractors Contributing family workers

Classification of status based on the type of economic risk Workers in employment for profit • Employers in household market enterprises • Own-account workers in household market enterprises • Dependent contractors • Contributing family workers Department of Statistics Workers in employment for pay Owner-operators of corporations • Employers in corporations • Owner-operators of corporations without employees Employees • Permanent employees • Fixed-term employees • Casual and short-term employees

Status at Work • Three level hierarchical classification • An extension of Status in Employment to cover all forms of work • 20 mutually exclusive categories at 3 rd level – defined on the basis of • the type of authority that the worker is able to exercise in relation to the work performed, • the type of economic risk to which the worker is exposed. • Covers all jobs and work activities in all forms of work, including own -use production work, employment, unpaid trainee work, volunteer work and other forms of work. • Each detailed Status at Work group relates to only one form of work • Aggregate categories are based on the type of authority ILO Department of Statistics 21

I 1 Independent workers Employers** 11 12 13 14 15 2 Owner-managers of corporations with employees* Employers in household market enterprises* Employers in own-use production of services Employers in own-use production of goods Volunteers employing others Own-account workers** 21 22 23 24 25 Operators of corporations without employees* Own-account workers in household market enterprises* Own-account workers in own-use production of services Own-account workers in own-use production of goods Own-account volunteers ILO Department of Statistics 22

D 3 30 4 41 43 44 5 51 52 53 6 60 7 70 9 90 Dependent workers** Dependent contractors* Employees* Permanent employees* Fixed-term and seasonal employees* Casual and short-term employees* Family helpers** Contributing family workers* Family helpers in own-use production of services Family helpers in own-use production of goods Unpaid apprentices, trainees and interns Dependent volunteers Other workers ILO Department of Statistics 23

ICSW-18 versus ICSE-18 I Independent workers** 1 Employers** 11 Owner-managers of corporations with employees 12 Employers in household market enterprises* 13 Employers in own-use production of services 14 Employers in own-use production of goods 15 Volunteers employing others 2 Own-account workers** 21 Operators of corporations without employees* 22 Own-account workers in household market enterprises* 23 Own-account workers in own-use production of services 24 Own-account workers in own-use production of goods 25 Own-account volunteers D Dependent workers** 3 Dependent contractors* 30 Dependent contractors* 4 Employees* 41 Permanent employees 42 Fixed-term employees 43 Casual and short-term employees 5 Family helpers 5 Contributing family workers 51 Contributing family workers* 52 Family helpers in own-use production of services 53 Family helpers in own-use production of goods 6 Unpaid apprentices, trainees and interns 60 Unpaid apprentices, trainees and interns 7 Dependent volunteers 70 Dependent volunteers 9 Other workers 90 Other workers ILO Department of Statistics Employment Four forms of unpaid work 24

SNA production boundaries and status at work In addition to employment, the following groups are within the SNA Production Boundary: 14 15 24 53 60 70 Employers in own-use production of goods Volunteers employing others Own-account workers in own-use production of goods Family helpers in own-use production of goods Unpaid apprentices, trainees and interns Dependent volunteers Groups concerned with own-use production of services and with ownaccount volunteering are beyond the SNA Production Boundary but within the General Production Boundary. 13 23 25 52 Employers in own-use production of services Own-account workers in own-use production of services Own-account volunteers Family helpers in own-use production of services ILO Department of Statistics 25

Concepts to be covered by a series of cross-cutting variables Required for ICSE-18 • Duration of work contract • Contract type • Contractual hours of work • Forms of remuneration. • Place of work • Job-related social protection coverage Department of Statistics Essential Recommended • Duration of employment in the current economic unit • Reason for nonpermanent employment • Seasonality • Full-time/part-time status • Domestic workers • Homeworkers and outworkers • Multi-party work relationships • Paid annual leave • Paid sick leave • Apprentices, trainees and interns • Number of employees in the economic unit in which the worker is employed • Main form of remuneration

Domestic work and domestic workers Domestic work - All work performed within households to provide services for consumption by household members’. Domestic workers - Workers employed for pay or profit, including in kind payment, who perform work within households to provide services for consumption by the household including: § § Domestic employees, defined as all workers engaged directly as employees of households to provide services for consumption by the household members, irrespective of the nature of the services provided. (a) Live-in domestic employees (b) Live-out domestic employees Workers who provide services within or for households on a regular basis but are not employed directly by the household, when the nature of the work performed mainly comprises domestic services such as cleaning, child care, personal care, and food preparation , gardening, driving and security. . c) Domestic workers employed by service providers d) Self-employed domestic service providers Department of Statistics

Operational measurement of domestic workers Domestic employees • Economic activity of their employer is equivalent to ISIC Rev. 4 Division 97, Activities of households as employers of domestic personnel. Ø For most operational measurement purposes data on employment classified at 1 digit level to ISIC Rev 4 Section T, Activities of households as employers; undifferentiated goods and services- producing activities of households is sufficient. Domestic workers employed by service providers § Employees of economic units other than private households who provide domestic services in private households. Ø Occupation is one of the occupations commonly held by domestic employees, Ø Place of work is the client’s residence Self-employed domestic service providers § Workers employed for profit who provide domestic services to private households Ø occupation is one of the occupations commonly held by domestic employees Ø place of work is the client’s residence status in employment is employer, ownaccount worker or dependent contractor. v Possible need for a further qualifier ‘and the economic activity of the employer is relevant for the provision of domestic services’. Department of Statistics

Multi-party work relationships A third party is involved between the worker and the economic unit for which the work is performed. Ø One institutional unit acts as the employer and makes the worker available, on a temporary or permanent basis, to work for another economic unit while paying the wage or salary of the employee. (a) Private employment agencies that supply the workers but are not generally involved in supervision of the work; (b) Government agencies in the context of schemes such as employment promotion programmes; (c) Service provision agencies such as nursing agencies, domestic or office cleaning service providers, and security service providers Ø employing agency may supervise some elements of the work and establish standards of service, while the client may also provide day-to-day supervision over work performed on its premises. Department of Statistics

Operational measurement of workers in Multi-party work relationships • The work is not mainly performed at the premises of the agency that pays the employee. • Place of work is usually the premises of the client but may be some other place. Ø This group of workers may therefore be identified in statistical sources through questions on v who is responsible for payment of wages and salaries, v the place of work. It may be possible to identify and make the distinctions between these three groups on the basis of the institutional sector and economic activity codes. ü ISIC code of the employer = 782, Temporary employment agency activities, ü place of work is NOT the premises of the employer, NOT the worker’s own home, Ø worker can be classified in category (a) Department of Statistics

Possible issues for discussion 1. Extension of ICSE to cover all forms of work, in the form of the proposed International Classification of Status at Work (ICSa. W); Ø Relationship between the two ICSE-18 hierarchies as derived classifications based on ICSa. W-18 Ø Use of common codes and definitions for categories that appear in more than one classification hierarchy; 2. Definition of job/work activity 3. Micro-entrepreneurship and forms of employment that challenge traditional notions of independent self-employment (dependent contractors); 4. Relationship between the status at work categories and SNA production boundaries; 5. The development of a new suite of labour related classifications that will complement the revised ICSE and proposed ICSa. W; 6. The statistical measurement of multi-party employment relationships, such as workers employed by labour hire companies, where the employer and the unit for which the work is performed are not the same Ø potential impact of ICSE changes or clarifications and its revised structure on ISIC interpretations, in particular in the case of outsourcing activities 7. The measurement of domestic workers based on ISIC, ISCO and classifications of place of work 8. Expert Group’s participation in the Working Group for the revision of ICSE; Department of Statistics

Thank you ILO Department of Statistics 32