What is a Contingent Worker?

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What Is a Contingent Worker?

Are you looking to enter the workforce and assessing your options? If so, you may have heard the term “contingent worker” before. A contingent worker is different from a regular employee who is hired to oversee an open-ended workload, and in fact, there is also more than one type of contingent worker! Read on to determine whether or not a future as a contingent worker is a good fit for you.

What Is a Contingent Worker?

A contingent worker is someone who is providing a service or working for a company, without being hired as a permanent employee. You’ve probably heard these types of workers referred to as “temps” before. These workers are usually provided by a staffing or hiring agency, and are hired to fill roles temporarily or to assist with particular workloads and projects.

This is different from a permanent employee because a permanent employee is hired with the expectation that they will remain in the position and take on different tasks as they arise. Typically, if the project that a contingent worker is hired for is then completed, the contingent worker no longer has a place at the company. If this were a permanent employee, the individual would be given a new task or project to get started on. Contingent workers offer their services in different capacities as well– either under a contract, temporarily, or on an as needed basis. 

Why Be a Contingent Worker?

As with any type of job, there are pros and cons of being a contingent worker. Some may prefer the stability of being a permanent employee, for example. However, there are perks to being a contingent worker, too! Contingent workers are usually afforded additional independence in the workplace, so if you prefer to work on your own and do not do well with micromanaging, this could be a good fit for you. These types of workers, if they are savvy and successful, are often able to make more money or work less hours than a permanent employee. In some cases, both of these may be true! 


If you are a freelancer or contractor not employed by a staffing agency, you can also set your own rates and often your own hours, and you are free to choose from the projects that interest you the most when accepting a job. For example, if you are choosing between two different companies, you can make a choice related to how interesting or fun you find the work they need done.

Why Hire a Contingent Worker?

Companies take on contingent workers for a few different reasons. Hiring contingent workers can be beneficial from a payroll perspective, as companies do not have to pay for benefits and only have to pay for the agreed upon amount for the work, rather than paying a salary as for a permanent employee.

Contingent workers are also responsible for their own taxes, so an employer can save on tax costs. Contingent workers are also a good fit in some cases where there are projects that need to be completed, but there is not necessarily enough work to warrant hiring additional permanent or full time employees for.

How to Be a Contingent Worker

However, not just anybody can be a contingent worker. A business must make sure that it classifies its workers correctly in order to avoid penalties come tax time, and you should be sure that you fall under the category of contingent worker as well. It is wise for you to seek legal counsel if you are looking into pursuing work as a contingent worker, since labor laws can be complex and potentially confusing for those who are unfamiliar with this type of language.

Some of the aspects to take into consideration are the permanency of the business relationship between you and the employer, and the amount of independent business organization and operation you complete for yourself. After all, if you are a permanent employee, you cannot also be considered a contingent worker.

However, if you do a lot of work for the company but it is on an as needed basis, or you perform work for them through your own social media agency, for example, then you are most likely considered a contingent worker. 

Types of Contingent Worker

As mentioned previously, there is more than one kind of contingent worker. This can depend on different factors, such as the amount of time a worker is expected to be with the company, or on the types of work or projects they are completing. The details outlined in the contract between the two parties is also important in determining what type of contingent worker an individual is. Temporary contingent workers– or temps–, contractors, and consultants are all different kinds of contingent workers, and fulfill different needs.

Temporary Contingent Worker

Temporary contingent workers are usually workers who are provided by a hiring or staffing agency. In most cases, this means that the staffing agency also handles payment and benefits details. Temps do not set their own rates– these are set by the agency itself. Temps are also hired to work onsite, rather than remotely, which some other types of contingent workers are able to do. 

Temps are the best solution for businesses who need additional staff for short periods of time, such as scaling up during busy seasons or when employees are on short term leave, like parental leave.

This is because temporary contingent workers are hired for projects that last anywhere from a few hours to a few months. With temps, companies do not have to pay employment taxes or pay for benefits.


Consultants are experts in their particular field. Some examples of consultants could be a marketing or publicity consultant hired by a company to help strategize on launching a new product. You will not find a consultant working under the constraints of a hiring agency. Typically, consultants run their own agencies or conducting businesses, which also means that they set their own prices or rates, as well as their own hours of availability. Just like with temporary contingent workers, this means that the business does not need to pay for a consultant’s benefits as they would for a permanent employee. 

Consultants do differ from the other types of contingent worker in that they do not actually perform a lot of the work required for a project. Rather, they provide strategies, advice, and guidance on a project within their sphere of expertise, so that others within the company can execute the necessary work required.

Consultants also work with a higher level of independence than temporary contingent workers are able to. 


The category of independent contractor covers individuals such as freelancers, gig workers, and certain types of consultants. These workers are those who are not represented by a staffing agency or a consulting firm or agency, and are self employed, independently offering their services to the general public. Like other types of contingent workers, these individuals are not eligible for benefits provided by a company, and are responsible for their own employment taxes. In this case, it is also because they are considered self employed.

Independent contractors are afforded higher levels of independence than permanent employees, and a company cannot regulate how or when the work gets done– besides defining any deliverables and deadlines in the contract, of course! This type of contingent worker is a good fit for when a company requires specialized service or expertise but does not need it at a full time level. 

Frequently Asked Questions

What is considered a contingent worker?

A contingent worker is an individual who works for a company or an organization without actually being hired as an employee, like a contractor, for example. These types of workers may offer their services on an as needed or temporary basis, or as outlined under the terms of a contract. Typically, a contingent worker is hired to complete a specific project, rather than ongoing work.

What is the difference between a contractor and a contingent worker?

Contingent workers are often provided by a staffing company, and pay rates are set by this company, whereas with contractors, they work for themselves and can set their own pricing structures and hourly rates.

Is a contingent worker an employee?

No, contingent workers are not considered employees of the company they are providing their services to. Contingent workers work as freelancers for the company, so their employment status is directly related to the existence of the project they are working on– unlike an employee and their employment status at the company.

How long can you be a contingent worker?

The time allowed for you to be a contingent worker can vary. For example, some companies require that contingent workers be switched out after a certain amount of hours, and others operate under time periods such as 12 or 18 months before changing contingent workers.

This is also dependent on the services a contingent worker is offering and the project they are working on– some companies may want the worker to stay however long it takes to complete a project.