A workforce made up of freelancers, contractors, and temporary employees who are not part of the permanent staff
What Is a Contingent Worker?
A contingent worker is a non-permanent worker who provides services to an organization without being hired as a direct employee. These individuals often work under a contract or on a temporary/as-needed basis. They are typically brought in for specific projects or short-term needs, rather than open-ended or ongoing employment.
Examples of contingent workers include:
- Independent contractors
- Freelancers
- Consultants
- Temporary agency workers (employed by third-party staffing firms but assigned to your company)
Why Do Some People Choose to Be Contingent Workers?
Contingent work offers a variety of personal and professional advantages, such as:
- Higher earning potential through project-based or specialized work
- Flexible work hours and autonomy
- Freedom to choose projects and clients
- Less oversight, legally, employers can control what work is done, but not how it's done
This level of independence makes contingent work attractive to highly skilled professionals and those seeking a better work-life balance.
Benefits of Hiring Contingent Workers
Organizations can gain several strategic and financial advantages by engaging contingent workers:
| Benefit | Description |
| Workforce flexibility | Easily scale staffing up or down based on project demands or seasonal fluctuations |
| Specialized skills | Hire experts for specific, high-skill tasks without committing to a full-time role |
| Cost savings | No need to offer employee benefits (e.g., health insurance, paid leave, pensions) |
| Tax savings | Independent workers pay their own income taxes; no payroll tax withholding required |
| Lower onboarding/training | Most contingent workers are experienced professionals who can get started with minimal ramp-up |
Who Qualifies as a Contingent Worker?
Not every worker can legally be classified as contingent. Misclassification can result in serious legal and financial consequences under U.S. labor law.
The Fair Labor Standards Act (FLSA) and IRS guidelines assess multiple factors, including:
- How integral the work is to your business
- Level of control over the worker
- Permanency of the relationship
- Worker’s investment in tools/equipment
- Opportunity for profit or loss
- Level of independence and business operation
If the person works like a regular employee, taking direction, using company tools, and relying on the employer for ongoing work, they likely do not qualify as a contingent worker.
Tip: Always consult legal or HR compliance experts when classifying workers, especially for long-term or recurring roles. Contingent workers can be a smart solution for meeting project needs, scaling quickly, and reducing costs, if done correctly. Used strategically and ethically, they can help you build a flexible and agile workforce while accessing top-tier talent on demand.
