Homeworking financial definition of homeworking
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homeworking work performed at home for an organization or individual. Such work is usually performed by those confined to the home for some reason (for example child-care commitments) and usually involves simple assembly or packaging and dispatch, though there are more sophisticated variants (see NETWORKING). It is commonly found in the clothing industry, either for simple manufacture at the bottom-end of the market, or for creation of one-off fashion design at the top end. Payment is usually based on output, and rates of pay are often very low. Since homeworkers are usually freelance, not employees, they receive little employment or earnings protection and do not contribute directly to the social INSURANCE system. For this reason homeworking can be advantageous to those business people who place a premium on minimizing labour costs as part of a policy of competing on prices. Labour costs may be kept at a level which makes it not financially worthwhile to automate the production process on the employer's premises. A recurrent problem, however, is a high drop-out rate amongst homeworkers (see LABOUR TURNOVER). Once they are no longer confined to the home conventional employment may be more financially and socially rewarding.