All work has dignity. Why do we work? Our lives revolve around it.

Work is a necessity, an integral part of who we are, what we do, how we define ourselves, respect ourselves, complete our identity, support ourselves and our families, and contribute to the one of the main measures of the economy of our country, the Gross Domestic Product (GDP) that measures the total monetary value of the output produced by a country's residents.

How we work, when we work, where we work, and who we work with — is when this basic need becomes more complicated: legalities, contractual obligations, restrictions, and accommodations, controlling factors and responsibilities, etc.

Gosh, it was simpler in the real old days of your parents/grandparents, or was it?

Back then, as an employee, generally, you had a job — for life.

You know, a bit of vacation, maybe a pay rise, a few paid holidays, and possibly after a number of years of service, you would be eligible for a defined benefit retirement plan and health insurance coverage, as all those benefits were introduced over years, then included into the equation.

You reported to, and were under employer control relative to duties, time, compatibility, job performance, etc.

Your employer was responsible for salaries, benefit payments, taxation, liability, property location, overhead, training, maintenance, worker’s compensation, possible life and insurance and much more. Employments contracts, if utilised, were probably minimally described, but gradually becoming more complex as technology advanced.

Or, back then, you may not have been able to obtain a steady 40-hour a week job, or you were never the type to work for someone else.

You worked for yourself any way you could, no such thing as a vacation, a bonus, or the having the immediate asset ability to qualify for bank financing. You were probably an unincorporated, self-employed business personally responsible for everything financial in your future.

If your transportation vehicle broke down, or you or your family became ill, or you failed to cover job-related property or physical damage, could not afford health or disability insurance, or had to draw down your contingency savings, you were severely vulnerable to financial distress.

Fast forward to today. Those two categories haven’t changed much, but the work environment itself has, dramatically.

Work definitions are considerably more complex: working from home (WFH), gig economy workers, seasonal workers, full-time employees working a side hustle job after hours, contract agency temporary, (or employee) workers, freelancers, project-based only consultants and so on.

Covid and rapidly rising inflation have impacted commerce, personal and business budgets.

Employee positions now come and go. You could be one for several years, then find due to cost containment, obsolescence, structural and technological change, you are now an independent contractor having to retrain, restructure and upskill your talents to regain credence in the workplace.

Businesses seek to maintain efficiency in employee compensation, statutory and related benefits, and overhead costs; part of that finance management may include hiring temporary, part-time workers, seasonal, non-compensated interns, or independent contractors.

Work has become a fluctuating commodity. The result: guidelines were not as clearly defined as they needed to be in the current economic climate.

How you are classified in the workplace has become extremely important to you and to employers in the hiring process.

This month, the Government of Bermuda and the Minister of Labour and Economy announced the issuance of The Independent Contractor Guidance Pursuant to the Employment Act 2000, the purpose of which is to provide guidance relative to the ever-present conundrum of defining who is an employee, entitled to protections afforded under the Act, and who is not.

The guidance introduction states: “How people work, where people work, and the way in which people work continues to evolve making it evident that in some cases the line between employees and other types of workers, including independent contractors, has become blurred.

“As business owners and employers seek creative ways to reduce the costs of doing business in Bermuda, employees are also exploring alternative ways of work which provide more flexibility and customisation.

“Where both trends intersect, the working relationship becomes less clear, and in some cases employee benefits are being compromised.

“This guidance is intended to be a resource with the goal of assisting employers in their assessment of whether they are hiring an independent contractor or an employee.

“Likewise, workers can refer to this guidance to assist with determining whether their working relationship more closely resembles that of an employee than an independent contractor. See enclosed chart.

“By providing clarity on the working relationship, this guidance also aims to:

“1, reduce the misclassification of workers,

“2, decrease unclear employment situations and

“3, lower the occurrence of disputes and Employment and Labour Relations Tribunal cases.”

The creation of this guidance was a collaborative effort by the Ministry of Economy and Labour and the members of the Labour Advisory Council (LAC). This guidance will take effect on April 1, 2023.

The document stresses that employers, and independent contractors should consult this guidance to assure correct worker classification is in compliance with the relevant legislation.

Readers, I’ve written about these issues in numerous columns over the last 22 years. See the complete section on employers, employees and independent contractors contained in Step 9 - the Dawn of New Beginnings; Bermuda’s First Financial Literacy Primer - hosted on The Royal Gazette website.

Listen also to the accompanying podcasts:

Step 9a: Employee Benefits

Step 9b: Independent contractor benefits and drawbacks

More on these very important topics going forward!

• Martha Harris Myron has been a finance journalist to The Royal Gazette, for 22 years. Contact me and/or subscribe to the Bermy Bermuda Island Finance Blog at info@marthamyron.com