Contingent workforce

Scope

These non-permanent workers help companies meet workplace demands.

Regulatory citations

• None

Key definitions

• Contingent worker: The terms "contingent workforce" and "contingent worker" refer to non-permanent, provisional employees. Examples of contingent workers include:
  • Consultants
  • Temporary workers (temps)
  • Independent contractors
  • Seasonal workers
  • Freelancers
  • Independent professionals
  • Temporary contract workers
  • Leased employees
  • Self-employed workers
  • Outsourced employees

Summary of requirements

Companies turn to contingent workers when the economy slows or when hiring traditional workers is a hardship. Many workers enjoy the flexibility and independence of contingent employment, often preferring it to permanent employment.

Staffing agencies or “temp agencies” help place temporary or “leased” workers at companies throughout the U.S.

Although having a contingent workforce offers employers advantages in terms of flexibility with staffing and employment cost savings, hiring contingent workers can also expose employers to certain risks.

To minimize liability, companies must understand the rules and regulations regarding temporary employees and familiarize themselves with the distinctions between traditional employees and contingent workers.

Best practices for employing contingent workers include:

• Know who employs the contingent worker. When a company works with a staffing agency to hire a contingent worker, the agency handles such details as wages, payroll taxes, and health insurance. Any problems that may arise with the person's work is usually addressed with the agency.
• Make expectations clear. Before bringing on a contingent worker, explain the expectations for what the job involves. Discuss other details, such as the expected quality of work and future plans for the position, department, or company if it impacts the contingent worker. For example, let the person know if the company hopes to hire the contingent worker in the future, or if the job is strictly a one-time project.
• Give the worker an orientation. Tell the contingent worker about the organization and its mission. Explain the company's core values, especially as it relates to the job the worker's been hired to perform.
• Introduce contingent workers to the rest of the staff. To set a contingent worker up for success and help traditional employees adapt to having someone new in the workplace, good communication is key. Introduce the contingent worker to the staff and let others know what project(s) the person will be working on.