Introduction
This Quick view provides a summary of how workers are classified across ten key jurisdictions around the world. It also directs users to comprehensive Q&A country guides, relevant legislation and case law as well as related commentary across Lexology.
For further guidance and in-depth analysis, please refer to our Panoramic Q&A on Labour and Employment and The Employment Law Review.
New jurisdictions added: China, Japan, Mexico
Jurisdictions updated: Australia, Brazil, Canada, European Union, France, Germany, Hong Kong, UAE, United Kingdom, USA
Worker classification around the world
In many jurisdictions, employment status is generally categorised as either an employee or an independent contractor. However, the rise of online services platforms and the increase in flexible work that pays per task, known as the gig economy, have raised questions about traditional employment relationships within the modern world of work.
Some jurisdictions, such as Australia and the UK, have introduced an intermediate status for workers that sits between employee and self-employed, offering limited statutory protections. Mexico has gone further, allowing digital platform workers to be treated as employees if they meet income and subordination thresholds, while the EU’s Platform Workers Directive will soon create a presumption of employment across Member States. Globally, courts and regulators are increasingly looking at the conditions of the working relationship rather than contractual labels, though this shift has sparked legal uncertainty and high-profile disputes. In the US, for example, employers face a patchwork of federal and state tests, while in Brazil, conflicting court rulings on gig worker status have escalated to the Supreme Federal Court, which is now considering a binding decision.
Employers must be diligent when determining worker classification as misclassification, whether intentional or not, risks significant fines and reputational damage. Legal claims on this issue are not uncommon, and when unmet tax liabilities are involved, the risks of fines or criminal penalties are even higher. Classification of the workforce can be a huge challenge for employers operating across multiple jurisdictions, as this determines various employment protections and statutory rights for employees, such as protection from unfair dismissal, minimum wage payments, notice period and tax liabilities.
Lexology PRO has pulled together below key guidance, legislation, and resources to analyse the employment landscape across ten key jurisdictions. These jurisdictions are also covered in our comprehensive Q&A country guides.
Australia
How are workers classified in Australia?
Australia recognises three categories of employment: employee, casual employee, or independent contractor.
The Fair Work Act 2009 dictates the statutory rights afforded to workers on issues such as pay, annual leave, working arrangements and working hours under the 11 national employment standards, which commenced in 2010. As of 26 August 2025, casual employees can initiate the Employee Choice Pathway to become permanent if they’ve worked for at least 6 month and believe they no longer meet the casual definition.
Do gig economy workers have distinct employment status?
The law governing gig economy workers in Australia has evolved to address longstanding ambiguity around their employment status. The Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024 introduced a new category of ‘employee-like’ workers, granting gig access to minimum standards for pay and conditions that mirror those of employees. From 26 February 2025, these workers are also protected against unfair deactivation under the Digital Labour Platform Deactivation Code, which outlines specific procedures that platform operators must adhere to when considering deactivation.
While gig workers are typically engaged as independent contractors and therefore excluded from entitlements such as minimum wage and paid leave, the Fair Work Commission now has the authority to assess the true nature of the working relationship and make binding minimum standards orders and non-binding guidelines for work performed by 'employee-like', digital platform workers and workers in the road transport industry.
At common law, the distinction is clarified by applying a multi-indica test which looks at the entire working relationship beyond the contract, such as:
- whether the person can subcontract or substitute their work;
- the control of the hiring entity over the work performed;
- who bears the administration costs (taxes, benefits, expenses); and
- whether the person is responsible for providing their own equipment relevant to the role.
Relevant legislation and/or case law
Digital Labour Platform Deactivation Code
Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024Federal, provincial, and territorial anti-discrimination legislation
ZG Operations Australia Pty Ltd v Jamsek [2022]
Deliveroo Australia Pty Ltd v Diego Franco [2022]
Stevens v Brodribb Sawmilling Co Pty Ltd [1986]
WorkPac Pty Ltd v Rossato & Ors [2021]
Panoramic
Labour and Employment - Australia
Related commentary
Employee Choice Pathway – Fair Work Ombudsman
Employee-like minimum standards orders and guidelines – Fair Work Commission
Employee-like workers – Fair Work Ombudsman
Gig-nificent Gains: New era of protections for gig workers
Understanding the new Fair Work Commission powers for gig workers and contractors
Brazil
How ware workers classified in Brazil?
Brazil recognises two categories of employment: employee and independent contractor. Statutory rights and protections are found in the Consolidated Labour Law 1943.
Do gig economy workers have distinct employment status?
Gig economy workers are typically classed as independent contractors and not employees. However, this classification is increasingly being challenged in the courts. While some regional labour courts have recognised an employment relationship between drivers and platforms such as Uber, Rappi and Cabify, the higher courts uphold the independent contractor classification - as decided in the 2020 Uber case (Portuguese language only) - citing the flexibility inherent in gig work.
In April 2025, the Federal Supreme Court suspended all labour claims related to contractor classification (Portuguese language only) while it reviews Extraordinary Appeal 1532603, a case that will be binding on how independent contractors are classified.
Simultaneously, Bill 536/2024 (Portuguese language only), currently under review, aims to regulate platform work. The proposals seek to secure social protections for app-based drivers (Portuguese language only) while preserving their autonomy as self-employed workers. Platform-work companies such as rideshare and delivery services should monitor developments closely, as they may significantly alter compliance obligations.
Relevant legislation and/or case law
Law on Outsourcing and temporary Work (No. 6,019) 1974
Extraordinary Appeal 1532603 (Portuguese language only)
Ministry of Labour Prosecution v Uber [2023] (Portuguese language only)
Marcio Vieira Jacob v Uber [2020] (Portuguese language only)
Related commentary
Canada
How are workers classified in Canada?
Canada recognises two categories of employment: employee and independent contractor. The Supreme Court of Canada developed a non-exhaustive list of factors for determining whether a worker is an independent contractor or employee. No one factor is determinative. These factors include:
- the level of control the employer has over the worker's activities;
- whether the worker provides their own equipment;
- whether the worker hires their own helpers;
- the degree of financial risk taken by the worker;
- the degree of responsibility for investment and management held by the worker; and
- the worker's opportunity for profit or loss.
Federally regulated employers are subject to the federal Canada Labour Code 1985, which includes employment standards, statutory rights, health and safety legislation, and trade union protections. Each Canadian province and territory has their own legislation and regulations relating to the above rights and protections.
Do gig economy workers have distinct employment status?
The law on gig economy workers varies by province and territory, with some recognising dependent contractors as a middle ground between status as an employee or an independent contractor. However, the court has made it clear that this is not a third category of employment and is only applied as a second prong to the test for independent contractors for the purposes of determining the notice period.
Ontario and British Columbia have recently updated their gig worker classification laws. Ontario’s Digital Platform Workers’ Rights Act 2022 took effect on 1 July 2025, granting new rights for online platform workers, including the right to minimum wage and recurring pay days, notice of termination, and imposing obligations on the employer to provide specific information relating to pay, hours and expectations. This effectively establishes a separate category of employment applicable to piecework, which provides statutory protections that sit between employment and dependent contracting.
British Columbia became the first jurisdiction to give basic protections for gig workers with amendments to the Employment Standards Act 1996 (ESA) and Workers' Compensation Act 2019 effective since 3 September 2024. The new legislation deems online platform workers employees for the purpose of employment standards and workers’ compensation coverage. However, the ESA recognises that gig workers are unique and has set out several important carve-outs for online platform workers.
Relevant legislation and/or case law
Working for Workers Act 2022 (Ontario)
Employment Standards Act 2000 (Ontario)
Ontario Inc v The Westport Telephone Company Limited [2022]
Canadian Union of Postal Workers v Foodora Inc [2020]
Thurston v Ontario (Children’s Lawyer) [2019]
Ontorio Ltd v Sagaz Industries Canada [2001]
Panoramic
Labour and Employment - Canada
Related commentary
Employer/Employee – Government of Canada
Employee or Self-employed? – Government of Canada
BC is the first jurisdiction in Canada to provide basic protections for gig workers
New Regulations for Gig Workers in Ontario and British Columbia
China
How are workers classified in China?
China recognises employees under its labour laws, but there is no specific category for independent contractors.
In practice, labour arbitration tribunals or courts tend to recognise the establishment of an employment relationship if the following main conditions are satisfied:
- both parties are legally allowed to form an employment relationship under the law;
- company rules and policies apply, and the person works under the company’s control for pay; and
- the work carried out by the individual is integral to the employer’s business.
The Labour Law of the People’s Republic of China 1994 sets out the rights and protections entitlements for employees, including working hours, wages, occupational safety, social insurance, and dispute resolution while the Labour Contract Law 2008 (Simplified Chinese language only) governs requirements for written contracts, employment terms, termination procedures, and severance obligations.
In addition, foreign workers are classified into one of three categories: Category A (high-end foreign talents), Category B (professional talents), and Category C (other foreigners meeting domestic labour market needs).
Misclassification risks under Labour Contract Law are significant. Non-compliance can result in fines, mandates for compensation, and even criminal prosecution.
Do gig economy workers have distinct employment status?
No, gig economy workers in China do not have a single, distinct employment status under current Chinese labour law. Chinese courts generally classify gig workers as independent contractors. However, the Supreme People’s Court released a batch of guiding cases involving disputes in the gig economy, which clarified the standards for determining worker classification and emphasised “dominant management” as a key indicator for an employment relationship.
In 2021, the government also issued guidelines (Simplified Chinese language only) offering targeted protections for gig workers and requiring platforms to ensure fair pay, reasonable working hours, occupational safety, and access to social insurance. The Trade Union Law 1992 was also revised to allow gig workers to join trade unions, strengthening collective bargaining rights. Local pilot programs, such as occupational injury insurance in cities like Beijing and Shanghai, were also launched in 2022 to cover gig workers.
Relevant legislation and/or case law
Labour Law of the People’s Republic of China 1994
Guiding Opinions on Safeguarding Labour Security Rights and Interests of New Working Forms (Simplified Chinese language only)
Trade Union Law of the People’s Republic of China 1992
Panoramic
Related commentary
Labour union law revised to include gig workers clause
China’s Evolving Regulatory Landscape for Independent Contractors and Gig Workers - HROne
Devastating Consequences: What’s the risk of misclassifying workers in China? - HROne
European Union
How are workers classified in the European Union?
The EU does not have overarching legislation laying out employment status, instead, it is for individual Member States to enact domestic legislation laying out worker classification.
Do gig economy workers have distinct employment status?
The EU Platform Workers Directive 2024 introduces the presumption of employment for platform workers, amongst other protections regulating algorithmic management for app-based workers. This means they are presumed to be employees unless the platform can prove otherwise. Member states have until 2 December 2026 to transpose the directive.
Relevant legislation and/or case law
EU Platform Workers Directive 2024
Related commentary
France
How are workers classified in France?
France recognises two categories of employment: employee and independent contractor. Statutory rights and protections are afforded under the French Labour Code 1973.
However, classification hinges on the existence of a subordination relationship, defined as work performed under the authority of an employer who can issue directives, monitor performance and impose sanctions.
Do gig economy workers have distinct employment status?
Generally, gig economy workers have the status of independent contractor. There are several instances where the French courts have reclassified gig economy workers as employees, however, the outcome of each case turns on its facts.
In July 2025, France’s Supreme Court ruled (French language only) that Uber drivers are independent contractors, rejecting claims of employment status even though earlier decisions had found that Uber’s operational structure created a subordinate relationship (French language only), suggesting the company exercised employer-like control over its drivers.
France must transpose the EU Platform Workers Directive by 2 December 2026, which introduces a presumption of employment where platform control is evident. This may challenge France’s current interpretation and lead to broader reclassification.
Relevant legislation and/or case law
Court of Cessation decision – Appeal No. 24.13.513 (French language only)
Court of Cessation decision - Appeal No. 23-18.430 (French language only)
Panoramic
Labour and Employment - France
Related commentary
Germany
How are workers classified in Germany?
Germany recognises two categories of employment: employee and self-employed. The rights and definitions of employment are found in the Civil Code 2002 for employees, and the Commercial Code 2002 for the self-employed. Status as an employee is determined by a contract of employment to perform work under the instructions and control of a third party, where the work performed is integrated into the employer’s business.
Do gig economy workers have distinct employment status?
No, gig economy workers are commonly classified as self-employed contractors. However, courts will scrutinise the actual working relationship rather than the contractual labels, as in a 2020 ruling (German language only) by the Federal Labour Court. The court held that a crowd worker was in fact an employee since their work was personally dependent on an incentive system by the online platform encouraging workers to accept as many jobs as possible.
The decision is limited to the facts of this case. However, it poses a risk to online platforms that contractually label employees as self-employed contractors when the reality of the relationship is that of an employee.
Germany must transpose the EU Platform Workers Directive by 2 December 2026, which introduces a presumption of employment where platform control is evident. This may challenge Germany's current interpretation and lead to broader reclassification.
Relevant legislation and/or case law
The Crowdworker Case 2020 (German language only)
The Works Constitution Act 2001
The Remuneration Continuation Act 1994
Panoramic
Labour and Employment - Germany
Related commentary
The employment status challenge: Key considerations for employers in Germany
Hong Kong
How are workers classified in Hong Kong?
Hong Kong recognises two categories of employment: employee and independent contractor. Statutory rights on wage protection, leave entitlements, termination, and collective bargaining are contained in the Employment Ordinance (Cap. 57) 1968, which is the primary source of employment law.
Common factors that are crucial to defining the relationship include:
- extent of control over work procedures, working time and methodology;
- ownership of work equipment and material;
- whether the work carried out was through the employee's own account with investment and management responsibilities;
- whether the individual is regarded as an integral part of the organisation;
- whether the individual has the liberty to hire and delegate;
- prospect of profit return and risk of loss;
- responsibilities in insurance and tax; and
- common industry practices of the profession.
Do gig economy workers have distinct employment status?
Gig economy workers do not have a distinct employment status in Hong Kong and are typically classed as independent contractors. The courts determine worker classification on a case-by-case basis by assessing the overall nature of the working relationship. Different circumstances have led to different outcomes.
In a 2023 ruling, for example, six couriers working for food delivery company Zeek were found to be employees due to the platform’s high level of control over their work, pay structure, and restrictions on subcontracting.
Whereas, a 2024 ruling held that a Deliveroo rider was not an employee, as the rider had autonomy over job acceptance, work hours, and the ability to delegate tasks.
Relevant legislation and/or case law
Employment Ordinance (Cap. 57) 1968
Gurung, Sanjayaman v Deliveroo Hong Kong Limited [2024]
Poon Chau Nam v Yim Siu Cheung [2007]
Panoramic
Labour and Employment - Hong Kong
Related commentary
HK court rules that gig delivery driver was not an employee
Recent ruling addresses the employment status of a gig delivery worker
Japan
How are workers classified in Japan?
Japan recognises two categories of employment: employee and independent contractor. The Labour Standards Act 1947 bestows protections and benefits to those classified as employees, while the rights of independent contractors are governed by the Civil Code (Amended 2020), which provides no statutory labour protections and relies solely on contractual terms.
In determining whether a person is an independent contractor, a court will consider whether they:
- have the discretion to accept or refuse work, manage service performance, and control working hours and attendance;
- have managerial authority to maintain order and assign tasks;
- assume liability for damages and full responsibility as a business entity;
- have financial independence by securing funds and covering necessary expenses; and
- take ownership or provision of tools and materials, rather than merely supplying labour.
Do gig economy workers have distinct employment status?
Gig economy workers do not have a distinct employment status under the existing labour law. They are generally treated as self-employed freelancers, not employees, and therefore fall outside the scope of the Labour Standards Act.
Japan’s Freelancers Act 2023, effective 1 November 2024, did however, establish new protections for gig economy workers in Japan without explicitly addressing gig workers’ employment status.
Under the Act, businesses must provide written contracts, ensure payment within 60 days, and cannot unjustly alter contract terms for projects exceeding one month. Companies must assist freelancers with work-life balance after 12 months of service and face penalties, including fines up to JPY500,000 (US$3,412) for non-compliance.
Relevant legislation and/or case law
Panoramic
Related commentary
Increasing protections for gig workers in APAC: key takeaways for employers
New gig economy worker protections have been introduced
Applicability of Employment and Labour Law - Worker Classification in Japan
Mexico
How are workers classified in Mexico?
Mexico recognises two categories of employment: employee and independent contractor. Employment is presumed whenever an individual renders subordinated services to another person for remuneration, regardless of the legal origin of the relationship.
Under the Federal Labour Law 1970 (FLL), employees are entitled to a wide range of non-waivable statutory benefits, which do not apply to independent contractors. The rights of independent contractors are governed exclusively by the terms of their civil or commercial services agreement.
Do gig economy workers have distinct employment status?
No, Mexico doesn’t have a third category of employment for gig workers. However, FLL reforms effective 22 June 2025 provide special rights and protections for gig workers. Digital platform workers may now be classified as employees if they provide personal, remunerated and subordinated services through a digital platform, so long as they earn a net monthly income from their work.
Digital platform employees can therefore enjoy the same employment rights as employees and access to the social security system. Employers are subject to various new obligations and fines for non-compliance, including recording working hours, providing training and establishing complaint channels.
Workers who earn less than one minimum monthly wage will still be considered independent workers.
Relevant legislation and/or case law
Federal Labour Law 1970 (Spanish language only)
Panoramic
Labour and Employment - Mexico
Related commentary
Reform to Mexico's Federal Labor Law Related to Digital Platforms
Labour rights for platform workers
Labor Reform regarding Digital Platform Workers
Legal Framework for Employee vs. Contractor in Mexico – L&E Global
United Arab Emirates
How are workers classified in the United Arab Emirates?
The UAE recognises two categories of employment: employee and independent worker. Distinctly, independent workers in the UAE often operate in one of the 35 “free zones” which may have separate legal frameworks. Independent workers are generally confined to rendering services within the “free zone” that they operate.
There are around 35 “free zones” which are established by individual emirates and may have entirely distinct legal systems when it comes to company and employment law, as in the Abu Dhabi Global Market, and Dubai International Financial Centre. Until recent residency reforms, expatriates could not be independent workers because all UAE workers must be sponsored by a locally licensed entity for work permit and residency visa purposes which makes working statuses outside of employee or self-employed difficult to develop.
Do gig economy workers have distinct employment status?
No, gig economy workers are typically employees under UAE employment law and are entitled to the same statutory wage, leave and dismissal protections as all other employees in the UAE.
Gig economy online platforms usually operate by entering a contract for services with a locally licensed car business to avail it of drivers and cars. This is due to the strict licensing and visa requirements enforced in the UAE which means that the driver remains an employee of the licensed car business and has no direct relationship with the online booking platform.
The New Labour Law, effective since 2 February 2022, introduced flexible work models such as full-time, part-time, temporary work and flexible working. The impact of these changes are not clear as progress is dependent on the enacting executive regulations, which are yet to be released.
Relevant legislation and/or case law
Federal Decree Law No. (33) of 2021 (New Labour Law)
Federal Decree Law No. (47) of 2021 (The Unified General Rules of Labour law)
Panoramic
Related commentary
United Kingdom
How are workers classified in the United Kingdom?
The UK recognises three categories of employment: employee, independent contractor (self-employed), and worker. The Employment Rights Act 1996 defines each category and dictates the statutory rights afforded to employment status. Other common law employment protections can be found under the Human Rights Act 1998 and the National Minimum Wage Act 1998.
The most important legal tests for UK courts to determine employment status are:
- the employer’s degree of control over the person;
- whether there is ‘mutuality of obligation’, where the employer is obliged to provide work and the worker is obliged to perform it;
- the test of personal service – whether the person is free to send a substitute to do the work in their place.
Do gig economy workers have distinct employment status?
Yes, gig economy workers are typically classified as “workers” under s.230(3b) Employment Rights Act 1996. A worker is entitled to basic protections such as statutory minimum wage, sick pay and 5.6 weeks of paid annual leave per year but do not have rights to unfair dismissal or redundancy pay, unlike employees.
In January 2025, the UK government issued formal warnings to gig economy companies regarding potential misclassification of workers as self-employed, which could deny them essential employment rights.
Nevertheless, courts and tribunals have continued to reach differing conclusions in recent cases on whether those in the gig economy are workers or independent contractors, with outcomes varying depending on the specific working arrangements.
The government also extended right-to-work check obligations in March 2025 to gig economy platforms, requiring them to verify that individuals have legal permission to work in the UK before allowing them to access work via apps or platforms.
Relevant legislation and/or case law
Uber BV and others v Aslam and others [2021]
Independent Workers Union of Great Britain v Central Arbitration Committee [2023]
Johnson v GT Gettaxi Ltd [2024]
Panoramic
Related Commentary
Atypical workers in the gig economy – House of Commons
Navigating employment status in the gig economy: two taxi cases with contrasting outcomes
Right-to-work checks and the gig economy: what employers need to know
USA
How are workers classified in the USA?
The US recognises two categories of employment: employee and independent contractor. There is a further distinction between exempt employees and non-exempt employees for the purposes of applying the Fair Labor Standards Act 1938.
The main difference between exempt and non-exempt employees is the entitlement to wage and overtime protections. Non-exempt employees are typically paid an hourly wage at a minimum rate and are eligible for overtime payments, whereas exempt employees are paid a salary and are not entitled to overtime payments.
Do gig economy workers have distinct employment status?
The US does not recognise a third category of employment for gig workers. Instead, the debate is between classification as an employee or independent contractor.
There are two main tests for distinguishing employment classification in the gig economy: the economic reality test (2024 rule) and ABC test. The 2024 rule uses six clearly defined factors to assess whether a worker is economically dependent on the employer. However, enforcement of the 2024 rule has been paused as of May 2025, and Department of Labor investigators have been instructed to revert to pre-2024 guidance, which applies a more flexible version of the same test.
Some US states like California, Massachusetts and New Jersey have proposed their own worker classification rules. 33 states are currently using the ABC test, which presumes employee status unless strict criteria are met. The ABC test was rejected at the federal level because it conflicts with Supreme Court precedent, which favours the economic reality test, and critics argue it places an onerous and confusing burden on employers.
Relevant legislation and/or case law
National Labor Relations Act 1935
Family and Medical Leave Act 1993
Employee or Independent Contractor Classification Under the Fair Labor Standards Act
Dynamex Operations West, Inc. v Superior Court
Panoramic
Labour and Employment - North America
Related commentary
DOL will stop enforcing 2024 worker classification rule
US Department of Labor Pauses Enforcement of Worker Classification Guidelines
Reliance on information posted
Whilst we use reasonable endeavours to provide up to date and relevant materials, the commentary and other materials posted on our site are not intended to amount to advice on which reliance should be placed. They may not reflect recent changes in the law and are not intended to constitute a definitive or complete statement of the law. You may use them to stay up to date with legal developments but you should not use them for transactions or legal advice and you should carry out your own research. We therefore disclaim all liability and responsibility arising from any reliance placed on such materials by any visitor to our site, or by anyone who may be informed of any of its contents.