The definition is based on the OIT resolution regarding the International Classification of Employment Status (15th CISE, 1993). The two dimensions that are essential for the concept of employment status are economic risk and authority.

The basic distinction is between employees and self-employed workers. Employees are all workers who have the type of employment defined as paid employment: jobs in which holders have implicit or explicit (oral or written) employment contracts, for which they receive a basic remuneration that does not directly depend on the income of the unit for which they work (this unit can be a corporation, a nonprofit organization, a government unit, or a household). Some or all of the instruments, capital goods, information systems, and/or premises used by the holders are owned by third parties, and the holders may work under the direct supervision or according to strict guidelines set by the owner or the persons employed by them. (Wage-earning individuals are usually compensated with salaries or wages but may also be compensated through sales commissions, piecework payments, bonuses, or in-kind payments such as food, housing, or training.)

Self-employment refers to jobs in which remuneration depends directly on the profits (or the potential to generate profits) derived from the goods and services produced (in these jobs, it is considered that self-consumption is part of the profits). Self-employed workers make operational decisions that affect the business, or delegate such decisions, but maintain the responsibility for the welfare of the business. (In this context, the business includes the operations of a single person.).

Wage workers with a fixed-term job/contract are employees whose main work will end after a predetermined period of time, or after an unknown period of time in advance, but defined by objective criteria, such as the completion of a task or the period of absence of the worker being temporarily replaced.