What Is a Contingent Worker?

A contingent worker is an individual who works for a company without being a permanent employee, such as self-employed workers, consultants, subcontractors, or workers hired by an employee placement agency.

What Are the Advantages of Hiring Contingent Workers?

The advantages of hiring contingent workers include:

  • Reducing a company’s labor costs
  • Reducing expenses related to hiring, training and HR management
  • Reducing payroll
  • Flexibility with fluctuating workloads
  • Bringing the expertise and experience of contingent workers to the company

What Is the Employment Status of a Contingent Worker?

The employment status of a contingent worker is generally that of a self-employed or independent worker: they do not receive the fringe benefits offered to company employees.

A contingent worker typically signs a service contract with a company to govern their working relationship.

Which Sectors Use Contingent Workers?

Any sector can use contingent workers, depending on their needs.

For example, retirement homes may hire workers from an employment agency to fill shifts. Restaurants may decide to use contingent workers to manage their social networks.

Why Do Some People Choose to Be Contingent Workers?

Some people prefer to be contingent workers because it gives them more flexibility, lets them manage their time as they see fit and avoids micromanagemen. Sometimes being a contingent worker means better pay and allows them to work fewer hours than an employee.

Do Contingent Workers Have Employment Contracts?

Contingent workers do not sign an employment contract with a company. Instead, they sign a service contract that outlines the service offered and the responsibilities of both parties.

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