Chapter 4: Who should be getting minimum wages
4.4 Workers in non-standard forms of employment
Non-standard forms of employment (NSFE) are receiving growing attention. They include, among others, “fixed-term contracts and other forms of temporary work, temporary agency work and other contractual arrangements involving multiple parties, disguised employment relationships, dependent self-employment and part-time work”.1
Among workers employed by these different types of contractual arrangements, several are classified as employees by their relevant legal system. This holds true particularly for workers under fixed-term contracts, temporary agency workers and part-time workers, even if significant exceptions may affect these workers in some countries. For this reason, they should be covered by minimum wage laws, unless an explicit exception applies.
International, regional and national legal instruments may also stipulate non-discriminatory treatment of workers in these forms of NSFE, in terms of wages, relative to their “standard” counterparts working for the same employer.For instance, under the ILO Part-Time Work Convention, 1994 (No. 175), “measures appropriate to national law and practice shall be taken to ensure that part-time workers do not, solely because they work part time, receive a basic wage which, calculated proportionately on an hourly, performance-related, or piece-rate basis, is lower than the basic wage of comparable full-time workers, calculated according to the same method” (Article 5).
Non-discrimination principles are adopted at the regional level, in the EU Directives on Part-Time Work (97/81/EC), Fixed-Term Work (1999/70/EC), Temporary Agency Work (2008/104/EC), albeit in some cases they are subject to some exceptions.
Some countries have also partially extended labour protection to categories of workers who do not qualify as employees under the relevant legal system. This category is recognized as “dependent self-employment”, the definition of which varies from country to country. Individuals in dependent self-employment are not automatically covered by minimum wage regulation, but this protection may nonetheless be extended to them.
In the United Kingdom, for instance, the category, “workers”, which encompasses both “employees” and other individuals performing work or services personally,2 was introduced, and labour protection was partially extended to them. Accordingly, “workers” are entitled to the national minimum wage even though they do not qualify as “employees” under United Kingdom law.
Other workers in NSFEs may be excluded from minimum wage protection because they are misclassified. This is particularly the case of workers in “disguised employment relationships”, which Recommendation No. 198 defines as "when the employer treats an individual as other than an employee in a manner that hides his or her true legal status as an employee, and that situations can arise where contractual arrangements have the effect of depriving workers of the protection they are due".
More work is currently under way at the ILO on the subject of non-standard forms of employment.
1 ILO, Governing Body, 323rd Session, Geneva, 12–27 March 2015, Conclusions of the Meeting of Experts on Non-Standard Forms of Employment (Geneva: ILO, 2015)
2 See Employment Rights Act 1996, Section 230 (3).
Among workers employed by these different types of contractual arrangements, several are classified as employees by their relevant legal system. This holds true particularly for workers under fixed-term contracts, temporary agency workers and part-time workers, even if significant exceptions may affect these workers in some countries. For this reason, they should be covered by minimum wage laws, unless an explicit exception applies.
International, regional and national legal instruments may also stipulate non-discriminatory treatment of workers in these forms of NSFE, in terms of wages, relative to their “standard” counterparts working for the same employer.For instance, under the ILO Part-Time Work Convention, 1994 (No. 175), “measures appropriate to national law and practice shall be taken to ensure that part-time workers do not, solely because they work part time, receive a basic wage which, calculated proportionately on an hourly, performance-related, or piece-rate basis, is lower than the basic wage of comparable full-time workers, calculated according to the same method” (Article 5).
Non-discrimination principles are adopted at the regional level, in the EU Directives on Part-Time Work (97/81/EC), Fixed-Term Work (1999/70/EC), Temporary Agency Work (2008/104/EC), albeit in some cases they are subject to some exceptions.
Some countries have also partially extended labour protection to categories of workers who do not qualify as employees under the relevant legal system. This category is recognized as “dependent self-employment”, the definition of which varies from country to country. Individuals in dependent self-employment are not automatically covered by minimum wage regulation, but this protection may nonetheless be extended to them.
In the United Kingdom, for instance, the category, “workers”, which encompasses both “employees” and other individuals performing work or services personally,2 was introduced, and labour protection was partially extended to them. Accordingly, “workers” are entitled to the national minimum wage even though they do not qualify as “employees” under United Kingdom law.
Other workers in NSFEs may be excluded from minimum wage protection because they are misclassified. This is particularly the case of workers in “disguised employment relationships”, which Recommendation No. 198 defines as "when the employer treats an individual as other than an employee in a manner that hides his or her true legal status as an employee, and that situations can arise where contractual arrangements have the effect of depriving workers of the protection they are due".
More work is currently under way at the ILO on the subject of non-standard forms of employment.
1 ILO, Governing Body, 323rd Session, Geneva, 12–27 March 2015, Conclusions of the Meeting of Experts on Non-Standard Forms of Employment (Geneva: ILO, 2015)
2 See Employment Rights Act 1996, Section 230 (3).