ILO Shifts Measures to Track Contractors to Help Policymakers

A new statistical category, dependent contractors, is emerging in labor data, highlighting workers who are neither traditional employees nor fully self-employed. The International Labour Organization (ILO) introduced the classification in 2018 to better capture these “intermediate” workers and their labor conditions.

“Dependent contractors are exposed to economic risks similar to the self-employed, but their autonomy is limited like that of employees,” says the ILO.

Dependent contractors have existed in urban and rural economies for decades but remained largely invisible in official statistics until the ILO’s 2018 International Classification of Status in Employment (ICSE-18). 

Previously, they were often grouped with employees, self-employed individuals, or family workers, masking their actual labor conditions. ICSE-18 added seven categories and ten subcategories, allowing analysts to distinguish workers by economic risk and decision-making authority. Dependent contractors provide goods or services under commercial agreements and rely on a single economic unit for organization, income, or market access, without being its employees.

Data from 16 countries shows wide variation in their number, from 0.3% of employed workers in Russia to nearly 19% in Tanzania. Higher proportions appear in lower and middle-income countries (averaging 9%) than in high and upper-middle-income countries (2.4%). They work across sectors including agriculture, manufacturing, transport, construction, retail, and services, with roles such as hairdressers renting salon chairs, platform-based drivers, consultants, home-based garment workers, and subcontracted construction labor.

Dependent contractors bear economic risk like the self-employed, including taxes and social security, but lack employees’ decision-making autonomy. They often hold multiple jobs, and hours vary by sector and demand. While these roles can provide immediate employment, conditions may be less secure, raising questions about rights, obligations, and legal recognition.

The ILO has supported ICSE-18 implementation through revised labor surveys to improve identification and measurement. Recognizing dependent contractors separately allows policymakers to target interventions and monitor labor market dynamics more accurately. Though they make up a small share of the workforce in many countries, their flexibility and role in filling labor gaps make them a significant component of modern employment, with better data informing more effective policies on inclusion and risk management.