A "worktype" is one more level in the hierarchy that you use for tracking time. You could use the Worktype to be a list of sub-tasks to the entries that you have in the Tasks object.
For a given task, the actual work done by different people can vary.
- e.g: In a project setting up HVACs in a new Google building in Dublin, Site Analysis may be a Task, followed by Installation. But with (say) 12 people involved, some may be handling the equipment while others may be checking the electrical wiring. So their Work-types could be "Equipment Siting'' and "Wiring". Basically, while Projects and Tasks are typically in a hierarchy, Work-types are things that happen in multiple projects/tasks and are usually related to specific skills.
You could also use Worktypes to identify if a Task is Billable or Non-Billable. In this case, you would have a set of tasks that you set up. You would set up your Worktypes to be Billable and Nonbillable. Your users would select the Task that they are working on and in the next level, select if the Task is Billable or Nonbillable.