How Do You Determine Employment Status with Deel’s Worker Classifier

Key takeaways

1. Worker classification is essential because it determines the rights, benefits, and obligations of both the worker and the hiring company under employment law.
2. Classifying international workers presents unique challenges for companies, mainly due to the complex and varied nature of international laws and regulations.
3. Deel’s AI-powered Worker Classifier assesses the classification of your workers worldwide so you can fend off misclassification risks.

What is employment status?

Employment status simply refers to whether someone is considered an employee, self-employed, or independent contractor. It’s all about the type of working relationship they have with the person or company they work for.

Here’s a breakdown of the different types of employment status and how they impact the employment relationship and work arrangements:

• Employee status: An employee works under a contract of employment. The employment arrangement typically has set hours of work, receives a regular wage or salary in line with the national minimum wage, and their employer deducts taxes and National Insurance (or Social Security) contributions from their pay. Employees often have more legal rights and benefits, such as sick pay, parental leave, and employment protections against unfair dismissal. Employees can work full-time or part-time
• Self-employed: Self-employed individuals work for themselves. They might have their own business or offer their services to different clients. Self-employed people usually have more control over when and how they work, but they’re responsible for paying their own income taxes and don’t have the same employment rights and protections as employees
• Independent contractor status: Independent contractors are also self-employed but work on a contract basis for clients or businesses. While they have more independence and a high degree of control over their work compared to traditional employees, they are hired to complete specific projects or tasks for a client under the terms outlined in a contract. Contractors are also self-employed for tax purposes. However, they may receive some benefits from the businesses they work for, such as access to certain facilities or resources, but they are generally not entitled to employee benefits like health insurance or paid time off