Who is an Employee? A Complete Guide

Imagine your business as a thriving ecosystem, where each role contributes to the overall health and growth of the organisation. At the heart of this ecosystem are your Employees. But Who is an Employee and what do they do? 

Understanding Who is an Employee is not just a matter of legal compliance; it’s about recognising the value each person brings to your team. Employees are the lifeblood of corporations and institutions, their labour and creativity driving the engines of progress and innovation. They are the individuals who bring ideas to life, execute strategies, and drive success. Let’s dive in to learn more!

Table of Contents 

1) Who is an Employee? 

2) What Does an Employee do? 

3) Different Types of Employees 

4) Tips for Hiring Employees

5) Conclusion 

Who is an Employee? 

An employee is someone hired by a person or company to perform services. Business owners pay employees to help grow and maintain the business. Employees usually have a set pay rate and an employment contract, either written or implied. However, some workers are not legally classified as employees and fall under a different tax classification. The IRS uses three main criteria to determine employee status:

a) Control of Finances: If you manage the financial aspects of a person's job, such as their payment schedule and method, they might be an employee.

b) Control of Behaviour: Employees follow specific policies, work schedules, locations, and use designated supplies and equipment. Training workers can also indicate an employment relationship.

c) Business Relationship: The nature of your business relationship with a worker affects their classification. Contracts and benefits suggest an employee-employer relationship. Hiring someone for an essential, ongoing role typically means they are an employee. 
 

What Does an Employee do? 

The Employee's functions differ from one field of activity to another, as do their respective jobs. Nevertheless, workers often have to do their work when it is assigned to them by the employer. On the other hand, they might be expected to attend meetings, team up with other workers, and hold discussions with clients or customers.

For example: A worker in a shop may perform such tasks as stocking shelves, helping customers, and operating a cash register. A worker in an office may be involved in answering phones, replying to emails, or filing documents. An Employee in a factory may be engaged in tasks like operating a machine, assembly products or performing quality checks.

Different Types of Employees 

Different types of Employees are classified based on their employment status. Let’s take a look at them below: 

1) Permanent Employees 

Permanent Employees are hired for an indefinite period of time and are entitled to all the benefits and protections that come with being an Employee. Let's explore some of the benefits: 

1) Health insurance 

2) Paid time off/vacations 

3) Retirement benefits 

Typically, Employees are expected to work full-time and are compensated with a monthly or hourly wage. Permanent staff members are essential to any organisation, providing stability and ongoing operations. Additionally, they are afforded opportunities for career development and professional advancement.  

2) Part-time Employees 

The difference between full-time and part-time Employees is that part-time Employees work fewer hours than full-time Employees, and are not entitled to the same benefits as full-time Employees. Nevertheless, they might be qualified for some benefits which include health insurance. They mainly get an hourly pay, and their working schedule is flexible.

Part-time Employees tend to be students, retirees, or people who value a balance between work and private life. They are an affordable backup workforce for businesses with limited budgets but need someone else.

3) Seasonal or Temporary Employees 

Seasonal or temporary Employees are hired for the duration of a particular period, such as, the holiday season or a one-off project. They frequently tend to be deprived of the right to the same privileges as permanent staff.  They are mostly paid on an   hourly basis and have a flexible time schedule.

Sometimes, retailers with a seasonal product demand hire Seasonal workers to ensure higher production or sales during a particular period of the year. They are an efficient way of dealing with the extra volume of work during the peak seasons.

4) Salaried (Exempt) 

Employees on Salary are paid a fixed amount for the specified number of working hours.  They are not entitled to overtime wages or other wage and hour laws. They are usually expected to work full-time hours.  

Salaried Employees are often professionals with managerial or executive positions within an organisation. They are responsible for making important decisions that affect the business. 

Hourly (Non-exempt) 

Hourly Workers are generally paid hourly wages for the hours they work. They are entitled to overtime payment and other pay-by-hour protections. They might work full-time or part-time, depending on their requirement level.  

Hourly Employees usually hold an entry-level position where they undertake either manual duties or office work in the organisation. They are an integral aspect of any company, completing daily tasks to make the organisation's function better and smoother.

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Tips for Hiring Employees

Recruiting staff is a crucial part of growing a small company. Here are a few crucial suggestions to make the process more efficient:

a) Understand Local Regulations: Get to know state and local labour regulations. This information will make your duties clearer and assist you in choosing between hiring full-time or part-time staff.

b) Plan Their Roles: Compile a list of all responsibilities you plan to delegate to new Employees and calculate the amount of time needed for each task. This planning aids in figuring out the required staff numbers and helps create specific job descriptions.

c) Organise Hiring Documents: Make sure you have all required forms prepared, including tax documents and any other work-related paperwork. Getting these ready ahead of time can help streamline the job offer extension process.

d) Consider Insurance Needs: Although not required universally, getting workers' compensation and disability insurance can safeguard your business from responsibility and ensure the well-being of your Employees.

e) Offer Attractive Benefits: Basic perks like paid time off or flexible schedules can attract top candidates to your job openings.

f) Develop HR Policies: Despite having a small team, it is advisable to set up defined HR policies. These policies must address topics such as wrongdoing, absence due to illness, and other work-related matters to maintain a properly governed work atmosphere.

Utilising these tactics can enhance your recruitment process, helping you attract the right candidates. This ensures you hire and retain individuals who contribute to your company’s growth.

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Conclusion 

We hope you read and understand Who is an Employee. Employees are an essential part of any organisation. Understanding the different types of Employees can help you make well-versed decisions about your business or career. 

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