Revision of the International Classification of Status in Employment Meeting of the UN Expert Group on Statistical Classifications New York, 19 -21 May 2015 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 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 Main purposes To provide a model for the development of national classifications for statistics on status in employment; and To provide the basis for the production of internationally comparable statistics on the topic.

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

Statistical treatment of particular groups that may be separately identified according to ICSE-93 Treatment of the following groups is included in the review Owner-managers of incorporated enterprises Regular employees with fixed-term contracts Regular employees with contracts without limits of time Workers in precarious employment Casual workers Workers in short-term employment Workers in seasonal employment Outworkers Contractors Workers engaged by labour hire agencies Apprentices or trainees Sub-categories of the five substantive ICSE-93 groups, or groups that cut across two or more of the substantive groups

Not proposed to be addressed as part of the review Statistical treatment of particular groups that may be separately identified according to ICSE-93 Not proposed to be addressed as part of the review Work gang (crew) members Employment promotion employees Employers of regular employees Core own-account workers Franchisees Sharecroppers Communal resource exploiters Sub-categories of the five substantive ICSE-93 groups, or groups that cut across two or more of the substantive groups

Main uses of statistics classified by status in employment Analysis of nature of economic risk and authority experienced by workers Strength of attachment of the worker to the employer and the job Relationship between economic cycles and employment in higher risk, less secure, or precarious working situations Impact of self-employment and entrepreneurialism on employment and economic growth Evaluation of government policies related to economic development and job creation Input to the measurement of informal employment Identification of wage employment and its distribution production and analysis of statistics on wages, earnings and labour costs Estimate revenue from social contributions differentiated by status in employment Input to statistics on the socio-economic status Explanatory variable in social statistics 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 aim to increase flexibility in the labour market increasing uncertainty about the boundary between self-employment and paid employment increased use of ‘dependent’ contractors 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 15th ICLS Optional categories and treatment of specific groups to be decided at national level Need for guidance on data collection 19th ICLS Resolution concerning statistics of work, employment an labour underutilization Strong consensus at the 19th ICLS on the need to revise ICSE-93

Forms of Work Framework (1): By main intended destination & transaction type (i.e. ALL activities to produce goods and services) For own final use (by households) Own-use production work For use by others (i.e. other units) For remuneration (i.e. for pay or profit) Employment (work for pay or profit) Without remuneration Unpaid trainee work Other work activities (e.g. unpaid compulsory work) Volunteer work Reference concept for Labour Force statistics Services Goods Services Goods S G S G G S SNA labour input ILO Department of Statistics

Implications for ICSE (and ICATUS) Employment concept has changed (narrower) One to one relationship with SNA production boundary no longer maintained Some ICSE categories no longer relevant to ‘employment’ New forms of work identified Extend beyond the scope of previous ‘employment’ and cover the General production boundary Question – which forms of work will the new ICSE cover? (How will ICATUS relate to the forms of work) ILO Department of Statistics

Issues to be addressed in the review of ICSE-93 - General issues Need for a conceptual framework for comparable statistics on various aspects of the relationship between the worker and the econimic unit in which she or he works Scope of the resolution and the new classification of status in employment Relevance of a distinction between paid employment and self- employment as a dichotomous pair of high level categories Which concepts are to be included in a new central classification of status? And which should be identified as separate variables/classifications? Relevance of the standards to informal employment situations Guidelines on data collection, questionnaire design and derivation

Issues to be addressed in the review - Specific issues (1) Boundary between self-employment and paid employment Owner-managers of incorporated enterprises Dependent contractors (dependent self-employed) Provision of clear definitions, methods for identification and categorisation of these groups Identification of workers with various types of employment arrangement that might indicate precarious employment situations such as casual, short-term, temporary and seasonal employees, and workers on zero hours contracts

Issues to be addressed in the review - Specific issues (2) The identification and statistical treatment of various specific types of worker including: apprentices, trainees and interns (paid and unpaid) entrepreneurs, family workers/helpers domestic workers homeworkers and outworkers, members of producers’ cooperatives, and workers engaged by labour hire agencies and in other triangular employment relationships

Overview of revision process Review of the national practices during 2012-13 Discussion paper on the need for revision of ICSE-93 presented to the 19th ICLS Mandate for revision Proposed to replace of the existing classification with a suite of standards for statistics on the work relationship 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 20th ICLS in 2018 in the form of a draft resolution for discussion, amendment, and ultimate adoption

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 forum Provide expert advice and technical input to ILO Assist with the development and testing of proposals Review first draft resolution for 20th ICLS Tripartite meetings of experts in 2017 and/or 2018 Relatively more formal Review draft resolution in English, French and Spanish

Outcomes of the first Working Group meeting 20th ICLS resolution on statistics of should embrace all forms work Continued need for a classification of status in employment. Once developed, this classification could point the way for the development of a broader conceptual framework for statistics on relationships and status at work for all forms of work. Some categories defined in the classification of status in employment would also be relevant for other forms of work and some would not. Separate category for Owner-managers of incorporated enterprises Provide guidance on methods for data collection, Provide clarity on their treatment in aggregate statistics. Separate category for Dependent contractors Clarify the scope, definition and classification of the group Investigate methods to measure it operationally

Dichotomy between paid employment and self-employment Is it relevant and useful to maintain a distinction between paid employment and self-employment as a dichotomous pair of high level categories? wide range of conflicting analytical uses of these categories in economic accounts, labour market and social statistics increasing number of types of employment arrangement that do not fit comfortably into either category. Owner managers/Working proprietors of incorporated enterprises Dependent contractors Freelance workers Contributing family workers Workers providing paid services to households ILO Department of Statistics

Dichotomy between paid employment and self-employment Paid employment jobs Explicit or implicit employment contracts give basic remuneration not directly dependent upon revenue of the employing unit Typically remunerated by wages and salaries May be paid by commission from sales, piece-rates, bonuses or in-kind payments such as food, housing or training. Self-employment jobs Remuneration is directly dependent upon the profits (or the potential for profits) derived from the goods and services produced (own consumption is considered to be part of profits). Incumbents make the operational decisions affecting the enterprise, or delegate such decisions while retaining responsibility for the welfare of the enterprise.

Classification of status based on type of authority/dependency Independent workers Employers Owner-managers of incorporated enterprises with employees Employers in unincorporated enterprises Own-account operators of enterprises Operators of incorporated enterprises without employees Own-account workers in unincorporated enterprises   Dependent workers Employees Regular employees Temporary employees Workers with casual, on-call and zero-hours contracts Employees without formal contracts Paid apprentices, trainees and interns Dependent contractors Family helpers

Classification of status based on the type of economic risk Workers in employment for profit Employers in unincorporated enterprises Own-account workers in unincorporated enterprises Dependent contractors Family helpers Workers in paid employment Owner-managers of incorporated enterprises Owner-managers of incorporated enterprises with employees Operators of incorporated enterprises without employees Employees Regular employees Fixed-term, short-term and seasonal employees Workers with casual, on-call and zero-hours contracts Employees without formal contracts Paid apprentices, trainees and interns

Conflict between two criteria ICSE-93 classifies jobs according based on two criteria: The type of economic risk The type of authority over establishments and other workers To make the distinction between ‘self-employment jobs’ and ‘paid employment jobs’ in line with SNA the type of economic risk criterion is mainly operationalized by considering whether the remuneration is: directly dependent on the profits based on an explicit or implicit contract which gives basic remuneration, typically through wages and salaries, not directly dependent upon the revenue of the unit in which they work.

Framework and classification for statistics on status at work Conceptual approach used for the classification of status in employment was used to conceptualise a broader framework and classification for statistics on status at work. Extends the concepts of dependent and independent worker to the other forms of work based on a matrix of authority/dependency and type of economic risk and remuneration (including without payment). Concepts such as family helpers and apprentices, trainees and interns are relevant for several forms of work Definitions can be reused to promote coherence between statistics on the different forms of work

Complementary variables currently proposed Duration of contract. Duration of current job Contract type Form of remuneration Seasonality (e.g. seasonal or not) Usual workplace Classification of domestic workers and a statistical definition of domestic work and domestic workers. Homeworkers and outworkers. Workers in triangular employment arrangements including those engaged by labour hire agencies. Trainee status.

Overview of timelines for revision of ICSE-93 2015 Working group meetings (May and November/December) Review of current practices and develop discussion papers and proposals for resolution of each problem area (ILO, consultants, WG members) 2016 Field testing and/or further investigation of outstanding problems as required Regional consultations Develop first draft resolution for 20th ICLS 3rd Working Group meeting (November/December) 2017 Redraft resolution Further testing if required Translate and edit draft resolution for Meeting of Experts 1st Meeting of Experts (June?) Redraft resolution in English, French and Spanish 2018 2nd Meeting of Experts (February?) Finalize draft resolution and papers for 20th ICLS Discuss and adopt resolution 20th ICLS (October)

Thank you ILO Department of Statistics

Resources and Contact 19th International Conference of labour statisticians http://www.ilo.org/19thicls ICLS Resolutions and Guidelines http://www.ilo.org/global/statistics-and databases/standards-and-guidelines/ STATISTICS contact statistics@ilo.org ILO Department of Statistics