Uncertain status of economically dependent workers
Published: 6 January 2005
Economically dependent workers (326 Kb pdf) [1] constitute a grey area in the labour market, displaying both employed and self-employed characteristics. However, they are economically dependent on the company that hires them, and a significant proportion are, in effect, subordinate employees, who have to respect work schedules and shifts (e.g. in call centres).[1] http://www.europa.eu.int/comm/employment_social/labour_law/docs/parasubordination_report_en.pdf
In 2003, labour market reform in Italy changed the regulations for economically dependent workers, bringing them into the category of ‘project collaborator’. The aim was to include them within the framework of dependent work. However, an online survey shows that, one year later, this reform has had little effect on either work organisation or working conditions.
Background
Economically dependent workers (326 Kb pdf) constitute a grey area in the labour market, displaying both employed and self-employed characteristics. However, they are economically dependent on the company that hires them, and a significant proportion are, in effect, subordinate employees, who have to respect work schedules and shifts (e.g. in call centres).
Economically dependent workers were the fastest growing labour market segment in Italy during the 1990s. Although they are not the only form of atypical work, they illustrate most clearly the transformation of both work content and the labour market. They pay social contributions, although lower than subordinate workers, and receive a salary from their employers, similar to dependent workers (IT0011273f, TN0205101s, Regalia, 2003 - 270 Kb pdf; in Italian). Their numbers are largely uncertain. According to INPS , the National Institute of Social Insurance, more than 2.8 million workers are registered ( 19% in 2003). However, these figures reflect a cumulative total, since there is no obligation to notify the authorities when a contract ends.
The 2003 report from Cnel (National Council for Economics and Labour) on the Italian labour market estimates that economically dependent workers number 827,000 (less than 4% of the workforce). This figure excludes doubtful cases, such as workers with another job, retired workers, and self-employed workers who belong to a professional body which has its own pension fund.
Working conditions since labour market reform
In the summer of 2004, one year after labour market reform (256 Kb pdf; in Italian), the Economic and Social Research Institute Ires Nazionale and Nidil, the relevant wing of Cgil , the main Italian trade union, launched a web survey for self-employed workers. The legislative reform had aimed at including economically dependent workers within a new category of ‘project collaborator’, differentiating them from workers who warranted a fully self-employed status, or from those working practically as employees (IT0307204f). Some 555 questionnaires were collected and the results were published in October 2004.
Only 11% of contract changes had resulted in employee labour contracts. The changes scarcely affected contractual or working conditions: 62% did not experience any change in salary, 30% reported a raise, while 11% replied that their salary decreased.
Firms tend to hire economically dependent workers on an effectively full-time basis: 80% work for just one employer, 63% carry out their work at the company premises every day, 75% are paid monthly (67% with a fixed compensation), just like dependent workers (Tables 1 and 2).
| One employer | Multi-employer | Average | Project collaborators | |
|---|---|---|---|---|
| Yes, every day | 70.7 | 34.8 | 63.7 | 67.3 |
| Yes, sometimes | 11.1 | 25.0 | 13.8 | 10.9 |
| No | 18.2 | 40.2 | 22.5 | 21.8 |
| Total | 100.0 | 100.0 | 100.0 | 100.0 |
Source: Ires Nazionale, web survey 2004
| One employer | Multi-employer | Average | Project collaborators | |
|---|---|---|---|---|
| Monthly | 81.7 | 50.0 | 75.5 | 81.5 |
| Every two months | 6.6 | 8.7 | 7.0 | 1.9 |
| Every three months | 2.9 | 9.8 | 4.3 | 3.7 |
| Irregularly | 6.9 | 12.0 | 7.9 | 9.3 |
| According to project advance | 0.5 | 9.8 | 2.3 | 1.9 |
| Upon presentation of work | 1.4 | 9.7 | 3.0 | 1.7 |
| Total | 100.0 | 100.0 | 100.0 | 100.0 |
Source: Ires Nazionale, web survey 2004
Income and social protection
The income of economically dependent workers is strictly related to working time and job content, but without any explicit link to collective agreements. Most non-qualified workers declare that they earn less than €800 a month, while most of the higher qualified workers declare they earn more than that (Table 3). A significant proportion of the latter work for public administrations and non-profit organisations; they often can take advantage of some of the protections afforded to the employees (Table 4). However, the best way of ensuring security generally is taking on too much work.
| Under €400 | €400- 800 | €800- 1,200 | €1,200- 2,000 | €2,000- 3,000 | Over €3,000 | |
|---|---|---|---|---|---|---|
| High level of education / high level of skills | 2.3 | 19.1 | 44.5 | 26.6 | 6.3 | 1.2 |
| Mid range education and average level of skills | 4.4 | 19.6 | 49.4 | 20.9 | 5.1 | 0.6 |
| Clerks | 18.3 | 35.6 | 41.3 | 4.8 | ||
| Trade and services | 16.1 | 48.4 | 19.4 | 12.9 | 3.2 | |
| Low level of skills | 28.6 | 57.1 | 14.3 | |||
| Total | 8.0 | 25.3 | 43.4 | 18.5 | 4.2 | 0.6 |
Source: Ires Nazionale, web survey 2004
| Public sector | Private sector | Non profit | Total | |
|---|---|---|---|---|
| Accident insurance | 52.8 | 30.0 | 41.2 | 38.7 |
| Sickness and maternity | 30.7 | 18.4 | 21.6 | 22.8 |
| Training | 19.7 | 21.1 | 21.6 | 20.8 |
| Union rights | 27.6 | 8.3 | 33.3 | 17.7 |
| Contract termination | 10.2 | 12.4 | 19.6 | 12.7 |
Source: Ires Nazionale, web survey 2004
Just over 35% of respondents stated that they had been in the same position longer than three years, especially those with higher skills. Thus, economically dependent work is often neither a temporary nor secondary job, but a stable job situation. Such workers form part of companies’ flexibility strategy; their work continuity is based on weak legal grounds, mainly trust between the worker and employer.
Satisfaction with working conditions
Some 62% of economically dependent workers are dissatisfied: women more than men (64.8% compared with 57.6%), younger workers more than older ones, and long-tenured more than short tenured. The main sources of dissatisfaction are a low level of social protection, low participation in company decisions, low compensation and few career prospects. On the other hand, relationships with colleagues and autonomy, both in work deployment and in working time management, are the main causes for satisfaction.
In general, uncertainty about income, job stability and protection has a greater influence than professional satisfaction. Research studies have shown that workers have to compensate for the lack of social protection and work security: over one third live with their families (e.g. as much as 46.5% in southern regions of Italy). This may partly explain why only half of them are looking for another, possibly more stable, job.
Eurofound recommends citing this publication in the following way.
Eurofound (2005), Uncertain status of economically dependent workers, article.
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