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Workers and Employment

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Introduction of Workers and Employment

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India is amongst the largest countries in the world and has a population growth of one percent every year. With the labour market in India expanding and becoming more complex, types of employment in India, as well as the types of workers, are changing at a rapid rate, in businesses. There are up to five or six kinds of employees working in a company on today's date. Here we will learn about what is employment in economics and also see some casual employment examples.


Introduction of Work and Employment in India

India is a developing market economy, with the main employment sectors in India being agriculture, industries, and services. The maximum share of employed individuals belongs to the agriculture sector. In the year 2017, factories had employed 11 million workers in the country. The image below represents the state of different employment sectors in India.

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Work Definition Economics

The word “work” has a broad meaning. It is not just a means to bring money home but also gives us a sense of worth. If we have to give an economic definition, work would mean doing something that helps build the national income of our country. 


Employment Definition Economics

So how do we define what is employment in economics? In the terms of economics, employment means the state of having a job or being employed. If one has to employ someone, they have to pay them. The one who employs is called the employer, and the one who is getting paid for providing services is the employee. Employers can be an organization or an individual, etc. People can also be self-employed where they work for themselves and earn money through their business. 

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Types of Workers

With the growing trend of freelancers and work from home employees, the types of workers are also growing. At any time a business can have 5 to 7 types of workers in their workforce. Having different types of workers helps organizations in adjusting their staff requirements during economic ups and downs so that they can enjoy peak productivity always. To answer who is a hired worker, we need to consider the different kinds of workers an employer can have in his or her organization.

If we have to define them in broad terms, the following types of workers are there in the industry.

  • Full-Time Employees

Employees who come under this category usually work 30 to 40 hours a week. Employers determine the minimum number of hours. An employer who has more than 50 full-time employees is considered as an ALE (applicable large employer). Full-time employees receive many benefits from the organization like paid time off, health insurance, provident fund, maternity leaves, etc. As per FLSA (Fair labor standards act), there is no standard definition of a full-time employee, and employers have the freedom to decide how they employ their full-time and part-time employees.

  • Part-Time Employees

When an employee works for less than 26 hours for an organization, they come under the part-time employees’ bracket. Such employees usually do not get the benefits that are offered to full-time employees, but employers must pay the same taxes for employing part-time employees as they pay for full-timers.

  • Seasonal Employees

During peak seasons like summer months or holidays, employers need to hire people to cover their productivity needs. For example, a retail company needs more people during the holidays. Many of the seasonal employees are non-immigrant or H-2B visa holders. To employ people in this category, employers must fulfill all labor certification documents and DOL requirements while requesting visas for these employees. Since they are not permanent employees, they are not eligible for other benefits, but the unemployment and social security benefits still apply to them.

  • Temporary Employees

These employees get hired for a fixed period under a contract. A company hires temporary employees to meet the needs of a certain project or task and let go of them once the project is over. Mostly the time period is 6 months, but it could vary based on the project. Like seasonal employees, the benefits of unemployment and social security apply to temporary employees too. Employers can hire temporary employees on their own, or they can go to a recruiting or consulting agency.

  • Leased Employees

When a staffing agency hires an employee and then leases the employee to a company for a specific project, such employees are termed as leased employees. Typically such employees work with a company that they are leased to for 1 year or more. Leased workers exist on the payroll of the staffing agency who employed them and leased them out, and not the organization they work for. The leased employees also receive other benefits of a full-time employee through the staffing agency.

FAQ (Frequently Asked Questions)

1. What is meant by casual employment?

Casual employment is a broad term used when an employer hires an employee as and when they need. There is no surety or guarantee of future work for the employee in such a case. When the employee is not working for the employer, they do not share any active relationship and bear no obligation towards each other, whatsoever. So if there is an unjustified dismissal, the employee cannot fire a personal grievance towards the employer if he has not been working for the employer during that time. Casual employees receive compensation only for the time they work without holidays and paid time off. Few casual employment examples are construction workers who work till the construction is over, people hired seasonally like on a farm during harvest time, etc.

2. What are gig workers and what are their types?

Gig-working is a new term that is used to define income-earning activities that are outside the realm of the traditional employee-employer domain. Gig basically means a temporary job and a gig economy is the one characterized by a free-market system where businesses use independent contractors for short durations. Gig workers also work for their talent and passion like the growing youtube stars and Instagram influencers. They basically follow their passion and then start earning by having a broad base of audience. McKinsey had split the gig workers into 4 different categories in 2016 as depicted in the image below:

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  • Free Agents - They choose independent work actively, and their primary income comes from this work.

  • Casual Earners - They choose independent work to supplement their main income. Doing this is their choice and not a financial necessity.

  • Reluctant - This kind of gig workers prefer traditional jobs but can earn their income only through independent work.

  • Financially Strapped - They have to do independent work to supplement their primary income as a necessity, due to their financial needs.