Who Are Contingent Workers?

Never before have we experienced the level of flexibility in work that we’re facing now.
The gig economy, a labor market characterized by contingent workers, has grown in
recent years – a trend accelerated by the global pandemic and digital transformation.

That’s not to say the contingent workforce hasn’t been a significant part of our US
workforce before Covid. Audrey Freedman, an economist who specialized in labor
issues while working for US Government and in the private sector, first coined the term
“contingent work” in 1985. At first, people believed contingent meant a lack of income
security, but perceptions and opportunities have changed over time.

What is a contingent worker?

Contingent workers run the gamut from independent contractors to part-time,
temporary, freelancers, and consultants. Many companies prefer the flexibility of
contingent workers because they can add or remove workers to match their workload demands. Many people prefer being contingent workers because they can determine
when, where, and how much they work and with whom they work.

Contingent workers are not your employees, and they are not on your payroll. When
you partner with an Employer of Record (EOR) like SCS, you still give direction to these
workers for their day-to-day or project-by-project activities, and we are their legal
employers, and we can handle their HR needs.

Clarifying Contingency
We have a broad lexicon of terms to define work practices and cutting-edge workforce
management solutions in the business community. Sometimes, our jargon can be
confusing. We like to label people for ease and understanding. Contingent workers like
to label themselves too for business and branding purposes.

The names we use for contingent workers are often interchangeable, but it may help
define some of the terms we use in this category.

Temporary contingent workers:
These workers typically work onsite on temporary work assignments that may last
anywhere from a few hours to a few months. Hiring this way is a good option for
companies that only need additional hands-on-deck for a short time. For instance,
companies that need to scale up for seasonal demand, require a specialized skill for a
short-term project or have key employees on short-term leave. Hiring temporary
workers fills those gaps without providing benefits, paying employment taxes, or even
planning for layoffs when extra workers are no longer required. Examples of companies
that hire temporary workers include retailers, shipping companies, tax preparers, ski
resorts.

Contractor:
An independent contractor is a temporary worker who can work for many clients at once.
These specialists usually take on larger projects for a longer term. Contractors might work
onsite in a client’s office or their own workspace. Examples of contractors: lawyers, marketers,
software developers, project managers

Freelancer:
A freelancer is self-employed and hired for a particular task or objective, i.e., designing
a logo, building a website, and writing a business plan. Depending on the work or
project, they can choose to work for one particular client at a time or juggle multiple
clients. They may bill their clients according to the project or by the hour. Examples of
freelance workers include journalists, copywriters, graphic designers, and web programmers.

Consultant:
Consultants may also work for one client or multiple clients at a time. An internal
consultant is someone who works primarily with one and is available to them for
ongoing recommendations. An external consultant is someone who is brought in to solve a problem or to give specific advice. Consultants are often experts in their field or
industry and market leaders.

Part-time: Not Contingent
Generally, part-time employees work fewer hours per week than full-time employees.
The Fair Labor Standards Act (FLSA) does not differentiate between full-time and part-
time employment. The maximum number of hours worked per week is approximately 30
hours, but it varies by state. Some people may consider part-timers as contingent
workers because their services are not needed on a permanent basis, but they are not
contingent workers because they are on your payroll.

Do you need to know more about hiring contingent workers? We are the experts. Reach
out to us here.