Non-standard forms of employment

Strengthening social protection for the future of work—extending the social security to workers in non-standard employment

Europe has been experiencing a growing diversification in working arrangements, as exemplified through the decline of standard employment and the significant growth of non-standard forms of employment. These developments were discussed at a recent Conference "Automation, jobs and the future of work: understanding political and economic consequences" organized by the New Direction Foundation.

News | 19 March 2019


ILO News talked to Kenichi Hirose, Senior Social Protection Specialist, ILO-Budapest, about trends and insights on how to cope with challenges arising from the growing non-standard forms of employment with respect to strengthening social protection.

What is meant by “non-standard employment”, and why it is an issue?

The ILO distinguishes four types of non-standard employment.  They are: (1) temporary arrangements, such as fixed-term contracts and casual work, (2) part-time and on-call work, (3) temporary agency work or other multiparty employment arrangements, as well as (4) disguised employment relationships and dependent self-employment. In addition, a recent notable development is the rise of workers in the “platform economy” (also called the gig economy), which is typically classified as independent contractors.

The emergence of non-standard forms of employment has created challenges for decent work, in particular when employment in non-standard arrangements is not voluntary. In 2014, 62 percent of European workers replied that they were in non-standard employment because they could not find a permanent job. Non-standard forms of employment can affect all aspects of working conditions, including freedom of association and collective bargaining rights, employment security, wages, working time, occupational safety and health, work-life balance, opportunities for training, as well as social security coverage.

What are the social security challenges of non-standard employment?

In most social security systems, coverage rates of workers in non-standard arrangements are lower than workers in standard employment due to restriction on minimum tenure, earnings or hours. Even if workers are eligible, their benefit levels can be low because of lower wages and shorter contribution period.

In this regard, the ILO Social Protection Floors Recommendation No. 202 adopted in 2012  calls for ILO member States and social partners to establish and maintain the social protection floors as part of comprehensive social security systems, which should ensure access to essential health care, including maternity care, and basic income security for children, persons in old-age, as well as persons in active age who are unable to earn sufficient income, in particular in cases of sickness, unemployment, maternity and disability.

How the existing social security systems can adapt to these challenges?

In Europe, the existing contributory social security schemes will continue to play the core role in social protection and adapt to non-standard forms of employment.

We recommend the following policies to extend the social security coverage to workers in non-standard forms of employment.

First, social insurance coverage for temporary, part-time and other workers can be improved by lowering the thresholds regarding the minimum duration of employment, minimum hours worked and by ensuring equal coverage across different forms of employment.

Second, social insurance coverage should also be extended to the categories of workers who are previously outside the scope of compulsory coverage, in particular for casual workers and self-employed workers.

Third, access to social security systems should be enhanced, for instance, by simplifying administrative procedures for registration and contribution payments, enhancing access to information about individual entitlements, and enacting measures to facilitate the portability of entitlements between different social security schemes and employment statuses.

Fourth, compliance and collection of social security contributions should be improved. For instance, measures should be taken against the tendency to misclassify workers as self-employed to avoid social insurance contributions.
What is the role of non-contributory, tax-financed social benefits?

Both contributory and non-contributory systems should be used to achieve a comprehensive social security system. Tax-financed benefits also play an important role in filling the gaps and ensuring at least a basic level of coverage especially for those who are not covered or not sufficiently covered by contributory mechanisms. In the area of health protection, tax-financing is essential for national health services and for subsidizing health insurance contributions for low-income workers.

While there has been a discussion on the possibility of introducing an unconditional universal basic income, there are still many open questions regarding its feasibility.

The recent report of the Global Commission on the Future of Work [Global Commission on the Future of Work  calls on countries to strengthen social protection systems to guarantee universal coverage of social protection from birth to old age to workers in all forms of work based on sustainable financing and the principles of solidarity and risk-sharing.

On the conference "Automation, jobs and the future of work: understanding political and economic consequences" organized by the New Direction Foundation please read here