1288.0 - Standards for Labour Force Statistics, Issue For Dec 2014  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 16/12/2014   
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UNDERLYING CONCEPTS

NOMINAL DEFINITION

Status in Employment is determined by an employed person's position in relation to their job, and is usually collected in respect of a person's main job if they hold more than one job. The Australian Status in Employment classification classifies employed persons according to the reported relationship between the person and the enterprise for which they work, together with the legal status of the enterprise where this can be established. The groups distinguished in the Australian classification are:

  • employee - a person who works for a public or private employer and receives remuneration in wages, salary, on a commission basis (with or without a retainer), tips, piece-rates, or payment in kind, and who does not operate his or her own incorporated or unincorporated enterprise;
  • owner manager of incorporated enterprise (OMIE) with employees - a person who operates his or her own incorporated enterprise, that is, a business entity which is registered as a separate legal entity to its members or owners (also know as limited liability company), and hires one or more employees in addition to themselves and/or other owners of that business;
  • owner manager of incorporated enterprise (OMIE) without employees - a person who operates his or her own incorporated enterprise, that is, a business entity which is registered as a separate legal entity to its members or owners (also know as a limited liability company), and hires no employees apart from themselves or other owners of that business;
  • owner manager of unincorporated enterprise (OMUE) with employees - a person who operates his or her own unincorporated enterprise or engages independently in a profession or trade, and hires one or more employees in addition to themselves and/or other owners of that business;
  • owner manager or unincorporated enterprise (OMUE) without employees - a person who operates his or her own unincorporated enterprise or engages independently in a profession or trade, and hires no employees apart from themselves or other owners of that business;
  • contributing family worker - a person who works without pay in an economic enterprise operated by a relative.

OPERATIONAL DEFINITION

Status in Employment is measured by determining if a person is:
  • an employee;
  • an owner manager of incorporated enterprise with employees;
  • an owner manager of incorporated enterprise without employees;
  • an owner manager of unincorporated enterprise with employees;
  • an owner manager of unincorporated enterprise without employees; or
  • a contributing family worker;
as defined above in the definition. The questions in the three standard labour force questionnaire modules are sufficiently detailed to assign an employed person to one of these mutually exclusive groups.

DISCUSSION OF ISSUES

In previous versions of this standard there was a clear distinction between 'paid employment' (formerly defined as 'employees' which comprised employees and OMIEs as listed above) and 'self-employment' (the last three groups, previously labelled employers, own account workers and contributing family workers). This clear distinction reflected a strong link to the concept of compensation or employees within the System of National Accounts, whereby wages and salaries of OMIEs are within compensation of employees. Further, the classification was based on the legal distinction between individuals and the business in which they worked. The review of this standard recognised that while remuneration of OMIEs is similar to employees, the other employment arrangements and characteristics are more similar to OMUEs than employees, as is the degree of control that they have over the business operations. While the current version removes the clear distinction between paid employment and self-employment, the new structure provides flexibility for users to group the categories in the standard in the way most suitable for analysis, i.e. OMIEs with employees when looking at the National Accounts concept of compensation of employees, or OMIEs with OMUEs when looking at employment arrangements, or those who own a business with employees can be compared to those without employees. The terms 'self-employed' and 'self-employment' are no longer defined in this standard and its use is no longer encouraged.

The review of the standard recognised that treating people who are paid commission without a retainer as not an employee was on the basis of their remuneration, rather than on the relationship between the person and the business. As a result, the current version includes people who are paid commission without a retainer as an employee. This group represents a very small proportion of the total employed and is not likely to result in a significant difference to estimates of people in the different categories of Status in Employment.