TECHNICAL GLOSSARY

Contingent Worker: Definition, Types, and Workplace Considerations

A contingent worker is an individual employed to complete a particular assignment, rather than being classified as a permanent employee of the organization. Typically, contingent employees do not appear on the company payroll and do not have access to fringe benefits such as healthcare, paid vacation time, or retirement plans, as do permanent employees. The benefit of using contingent workers for businesses is that it provides flexibility, while also providing the workers themselves with an opportunity to work on different jobs and earn multiple incomes.

Types of Contingent Workers

Independent Service Providers
An independent service provider, often called a freelancer or contractor, is any individual who delivers their service(s) independently and outside of traditional employer-employee relationships. Examples of independent service providers include:

• Freelancers
  Provide services to multiple clients (usually paid by the project). Freelancers maintain control of their work schedule and amount of work they accept.
• Contractors
  Typically, contractors will work on a predetermined (sometimes long-term) hourly, weekly or project basis with a company while maintaining their independence.
• Consultants
  Consultants can be utilized for short term advisory responsibilities, expert knowledge in a particular field, or project based support.
• Temps
  Typically hired through a staffing agency and hired for a specific short term need to supplement a full-time employee who is taking a leave of absence, or to assist during peak workload periods (i.e., seasonal spikes in work).
• Part Time Employees
  Employees who work less than an average of 40 hours per week and are not full-time employees; may have a flexible or reduced schedule.

Benefits of Contingent Workers for Employers

• Adaptability:
  Companies can rapidly adjust their staff size according to project requirements, without being tied to long-term contracts with employees.
• Cost Efficiency:
  Contract workers generally don’t qualify for benefits; thus, the overall cost of labor is reduced.
• Access to Specialized Talent:
  Organizations can recruit specialists for temporary contracts, rather than having to hire them permanently.

Challenges for Contingent Workers

• Job stability is often lacking, with contingent workers hired to do specific things for a predetermined length of time.
• If you’re a contingent worker, you probably will not have any kind of benefits, such as health insurance, retirement plans, or even paid time off.
• The amount of money you earn may change from week to week or month to month depending on how many projects are available or how many hours you have worked.