What Is a Contingent Worker?

contingent worker in factory

When we think of contractual workers, we often associate them with blue-collar jobs such as coal mining, logging, construction, and farming.

These are the occupations where we often see the term “contingent workers.”

However, other occupations fall into this category as well. In fact, there are currently over 15 million individuals working in the United States as contractual or contingent workers.

This article will explore what exactly these people do, and how they benefit from their employment.

Contingent work

Contingent work, short-term or contract employment, is a working relationship in which the employee is not entitled to wages, regular payment, or any kind of employment benefit usually associated with full-time employment. Contract workers, temp workers, and freelance workers all fall into this category. However, since this work is frequently unpredictable, it can also be characterized as being “on-the-job training” or “on-the-job experience.”

Contingent worker

Contract or contingent workers are employees who are not considered full-time regular employees.

The majority of contingent workers are hired for one specific project. For example, a plumber will usually be hired on a per-site basis to fix buildings that the employer builds. A bookkeeper will be hired on a per-contract basis to manage the books at the office building where she works. A truck driver will be hired on a per-mission basis to move products or load trucks.

Most contingent workers are temporary employees. Businesses do not typically hire an independent contractor for more than a few months before the person’s contract ends. The reason is that they are in a continuous state of flux. When a company hires an employee, it knows that it is likely that the person will change jobs at some point. This means that when the company initially finds out that an employee is temporarily moving to another location, it already has a short period of time to get its employee accustomed to the new location and new work processes before hiring them again.

contingent worker in factory

Benefits of hiring contingent workers

Payroll taxes are one of the main reasons that businesses hire temporary employees such as freelancers and independent contractors. The IRS understands that these workers do not have permanent employment status. Because they are technically not employees, they fall under the tax code section called the self-employment tax. The self-employment tax does not tax the workers’ salary or any type of fringe benefits like insurance but does tax the owners of the companies who hire these workers. Freelancers, independent contractors, and other contingent workers do not fall into this category.

Many companies have chosen to outsource these types of services to independent contractors because they offer flexibility and control over hours and the workload. What is important to know about these workers is that they have the same benefits as full-time employees, including paid holidays and paid sick days. They also typically have access to employer-provided health insurance and paid family leave programs. When these workers are hired on a contractual basis, their rights to privacy are also protected. This means that these employees have a better chance at achieving a promotion or a raise since they are given more responsibilities and greater flexibility than their counterparts who are hired on a regular basis.

Another benefit to hiring contingent workers is that most will qualify for group insurance and other employee benefits. While many people are reluctant to consider outsourcing certain areas of their businesses, they are finding that it is advantageous to hire an independent contractor who does not bring their dependents with them. This gives them greater job control and increases the opportunity to obtain company discounts or inexpensive employee benefits. The ability to reduce overhead and increase profitability is another great advantage to hiring these types of workers.


It can take a bit of time to find the right staff for your business. Therefore, you may want to consult with an independent business consultant to identify the best temporary workers for your business. In most cases, the consultant will be able to offer recommendations based on their experience. In many cases, the consultant will also be able to identify the right workers for your company through their connection to a network of temporary agency employees. If you feel you need more information regarding this opportunity, contact a staffing agency today.