APPENDIX 1 FORM OF EMPLOYMENT


FORM OF EMPLOYMENT

The following provides an outline of how people are classified in the 'Form of employment in main job' data item.

Persons are classified as employees (excluding owner managers of incorporated enterprises (OMIEs)), owner managers of incorporated enterprises and owner managers of unincorporated enterprises (OMUEs) based on their responses to questions in the monthly Labour Force survey (LFS).

Employees (excluding OMIEs) from the LFS are persons who:

• work for a public or private employer; and
• receive remuneration in wages or salary; or are paid a retainer fee by their employer and worked on a commission basis, for tips, piece-rates or payment in kind.

Owner managers of incorporated enterprises from the LFS are persons who:

• work in their own incorporated enterprise, that is, a business entity in which is registered as a separate legal entity to its members or owners (also known as a limited liability company).

Owner managers of unincorporated enterprises from the LFS are persons who:

• operate their own unincorporated enterprise, that is, a business entity in which the owner and the business are legally inseparable, so that the owner is liable for any business debts that are incurred. This category includes those engaged independently in a trade or profession.

These people from the LFS are then asked questions in the FOES to identify key characteristics of employees, independent contractors and other business operators. The responses to these questions are then used to determine how people are classified as employees, independent contractors and other business operators in the 'Form of employment' data item.

These questions are:

"Do you work as an independent contractor in your job?"

"Do you receive a pay slip/advice?"

"Do you/Does your business invoice or bill clients/employers?"

"Excluding wages and salary, are you able to make drawings from your employer/business?"

The following decision table, shows how people are classified in the 'Form of employment' data item.

COMPARISON WITH EMPLOYMENT TYPE

The data item 'Employment type in main job' that classifies persons according to the following broad categories:

• Employees (excluding OMIEs);
• Owner managers of incorporated enterprises; or
• Owner managers of unincorporated enterprises.

is commonly used in other Labour Supplementary Surveys.

The following table shows a comparison of the data items 'Employment type in main job' and 'Form of employment in main job'.

EMPLOYED PERSONS, Form of employment in main job - By employment type in main job-By sex
		EMPLOYEES (excluding OMIEs)
		With paid leave entitlements	Without paid leave entitlements	Total	Owner managers of incorporated enterprises	Owner managers of unincorporated enterprises	Total
Form of employment in main job		'000	'000	'000	'000	'000	'000
Males
Employees		3 745.1	942.0	4 687.2	12.9	19.9	4 719.9
	With paid leave entitlements	3 745.1	-	3 745.1	9.2	*3.7	3 758.0
	Without paid leave entitlements	-	942.0	942.0	*3.7	16.1	961.9
Independent contractors		21.0	63.3	84.3	245.8	494.3	824.4
Other business operators		-	-	-	316.1	332.0	648.1
Total		3 766.1	1 005.4	4 771.5	574.7	846.2	6 192.4
Females
Employees		3 211.5	1 212.2	4 423.7	7.0	15.1	4 445.8
	With paid leave entitlements	3 211.5	-	3 211.5	*3.4	*2.5	3 217.5
	Without paid leave entitlements	-	1 212.2	1 212.2	*3.5	12.6	1 228.4
Independent contractors		*6.1	28.0	34.0	59.7	192.3	286.1
Other business operators		-	-	-	164.2	234.7	398.9
Total		3 217.6	1 240.2	4 457.8	230.9	442.2	5 130.9
Persons
Employees		6 956.6	2 154.2	9 110.9	19.8	35.0	9 165.7
	With paid leave entitlements	6 956.6	-	6 956.6	12.6	*6.2	6 975.5
	Without paid leave entitlements	-	2 154.2	2 154.2	7.2	28.7	2 190.2
Independent contractors		27.1	91.3	118.4	305.5	686.6	1 110.5
Other business operators		-	-	-	480.2	566.8	1 047.0
Total		6 983.7	2 245.5	9 229.3	805.6	1 288.4	11 323.2
* estimate has a relative standard error of 25% to 50% and should be used with caution
- nil or rounded to zero (including null cells)

The table shows, there were 118,400 employees (excluding OMIEs) from 'Employment type' who were further defined as independent contractors in 'Form of employment' (comprising 84,300 males and 34,000 females). Similarly there were 54,800 owner managers (19,800 OMIEs and 35,000 OMUEs) from 'Employment type' who were further defined as employees in 'Form of employment'.

Of OMIEs (in 'Employment type'), 60% were further defined as other business operators in 'Form of employment' and 38% of OMIEs were further defined as independent contractors. By comparison, over half (53%) of OMUEs (in 'Employment type') were further defined as independent contractors in 'Form of employment', and 44% were further defined as other business operators.