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Employee Meaning: Definition, Types & How They Work

Explore the evolving definition of 'employee' and understand which workers fall outside this category, essential for managers to foster a productive work environment.

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What is an Employee?

This is a person who signed an agreement or a contract that obliges them to do certain tasks for a specific pay. Business owners and managers hire employees to do specific jobs and, in return, offer them monthly or yearly compensation with some additional benefits.

Labor laws state that a person is considered a statutory employee if their work is controlled by someone else; the manager or employer. They’re on the company’s payroll and are protected by wage and salary laws.

By definition, the employee has a job description that specifies what they have to do. Anything outside their scope of work can be subject to additional compensation, such as an overtime pay or any other benefit.

What is an Employer?

An employer is a person or business that hires people to do specific jobs. The employer may be one person or an entity with a mission and a goal. To achieve this goal, they must make plans that involve a lot of tasks to be carried out by employees.

Employers determine the roles of employees and assign tasks to them. They also provide feedback and guidance. They supervise work done by employees, reward them based on their performance, and offer them monthly or yearly compensation for their efforts.

What Do Employees Do?

Employees complete tasks set by the organization’s leaders or managers. Each employee is assigned a single task or multiple tasks, and they all work together to realize a plan set by managers.

Some employees work individually, while others are team members who must work in harmony. They all use their skills, knowledge, and experience to fill a specific role assigned to them.

Most employees, except top managers, aren’t responsible for making decisions. But they must report to their supervisors any obstacles they face. Employees will work within certain departments, and their roles won’t overlap most of the time, allowing them to focus on the assigned tasks.

4 Most Common Types of Employees

Employees can be classified according to different traits. But the most common one is dividing employees according to how the company hires them. According to this classification, there are four different types of workers.

1. Full-Time Employees

These are employees who work 40 hours or more per week. They have a full-time contract with the company or organization and are on its payroll.

It’s technically legal for these employees to work somewhere else or have a side hustle, but most of the time, they don’t have time to do this. Some benefits are only available when these employees cover a certain number of working hours.

For example, if employees work more than 50 hours per week, they and their dependents are eligible for social security and healthcare benefits.

Full-time employment provides stability and consistency of workloads and payments. These employees are highly productive when offered fair benefits and are usually loyal to the company because they fully understand the basics of work. A full-time employee also takes paid leaves according to his or her employment contract.

But they’re prone to workload stress and can sometimes feel stuck. The company also endures higher costs to hire full-time workers.

2. Part-Time Employees

Part-time employees or workers usually work less than 40 hours a week, and they can be paid according to an hourly rate or be assigned a specific salary. They’re still considered employees who work for a specific organization, but they might not receive all the benefits that full-time workers receive.

A part time employee has more flexibility and can represent a cost-efficient business solution. Employers and business owners hire these part-time employees when they want to have a larger pool of candidates and talents without committing to them.

This type of employment suits those who want to focus on something else in their lives and have a better work-life balance.

But, they might not be as invested in the company as full-time employees are. They might also not be as aligned with the company’s goals and missions as full-time workers.

3. Temporary & Seasonal Employees

These employees are hired for a limited period. After that, they’re no longer considered employees who work for the organization.

These contingent workers are usually hired for a specific purpose. They might be working on a particular project or mission but aren’t needed for other tasks. They can be considered full or part-time employees during the period they’re hired.

Employers usually seek the best talents in the industry for the most affordable pay when they consider temporary employees. They either recruit and hire them directly or go through a staffing agency to connect with them.

4. Contract-Based Employees

Contract-based employees or independent contractors are hired for specific tasks or projects. Their contract is limited to a certain period, and once it’s finished, they no longer work with the company.

These gig workers are hired to work on specific gigs, so they aren’t eligible for the benefits offered to the company’s employees.

The company or organization is responsible for its employees’ payroll tax forms, but gig workers, on the other hand, have to file their forms independently.

Who is Not an Employee?

You aren’t an employee if you’re an independent contractor or gig worker. All people who get hired through gig economy companies and marketplaces for specific tasks shouldn’t consider themselves employees or expect the same benefits employees receive.

Instead, your benefits and rewards are governed by the contract you sign when you accept the job.

Volunteers aren’t considered employees, either. They agree to do different types of work for the company and don’t expect to receive any rewards or benefits in return.

Wrapping Up

Understanding the different types of employees found in every organization will help you manage work and create a productive work culture that benefits your employees and the company as a whole.

Some workers aren’t considered employees, and some are considered employees for a limited period. So, what type of employee are you? Share your thoughts in the comments section.

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