What Is the Meaning of Contingent Worker?
State and federal laws create a wide variety of obligations between employers and employees. Many of these obligations, however, do not apply to contingent workers that are not technically classified as employees. The relationship between employer and employee is fraught with legal and ethical obligations. An employer enriches himself on the labor of the employee, but the employee needs the opportunity provided by the employer to convert labor into pay.
Other People Are Reading
-
Definition
-
A contingent worker is someone who performs services for an employer, but who is not technically an employee. This vast category includes temporary workers, called "temps," as well as freelancers, consultants and other contract workers. Contingent workers are usually hired for a specific project or a type of work for either a limited or open-ended period. They are usually paid a set contract price for a job or commission on a sale, but may also occasionally be compensated by an hourly wage.
Advantages to Employee
-
The primary advantage of being a contingent worker is flexibility. Many contingent workers have the ability to set their own hours and can often work without close supervision of an employer. Contingent workers are usually compensated and evaluated based on the final product of their efforts, not on the manner in which the work is performed, which can make it easier to balance work and family or other obligations. The ability to work from home by telecommuting and other similar freedoms makes contingent work an attractive option to some would-be employees.
-
Advantages to Employer
-
The same flexibility that benefits workers tends to also benefit employers. Using contingent workers makes it easier for employers to adjust to seasonal or economic fluctuations in the marketplace. The employer does not have the same legal obligations to a contingent worker as they do to a regular employee. In particular, the employer does not have to contribute to a contingent worker's payroll taxes, provide insurance or retirement benefits and are not liable for workers' compensation.
Dept. of Labor Recommendations
-
According to the U.S. Department of Labor, tax, labor and employment laws give employers a perverse incentive to use contingent workers not for flexibility, but to evade obligations to their workers. The department thus recommends changes in the definitions of employer and employee that would include contingent workers and make it more difficult for companies that benefit from human labor to avoid the responsibilities of being an employer. The recommended changes would use the economic realities of the marketplace and the actual benefit conferred by the workers to establish legal obligations.
Existing Protections
-
Despite the lax obligations of an employer to its contingent workers, there are nevertheless some legal protections for non-employee service providers. Anti-discrimination laws make it illegal for a employer to discriminate on the basis of age, sex or disability regardless of whether a worker is an employee or contingent worker. Similarly, a worker's status as a contingent worker does not negate the application of minimum wage laws, overtime pay requirements and other fair labor standards protections. Additionally, if they perform work at the employee's workplace, contingent workers are entitled to a safe environment that complies with Occupational Safety and Health Act (OSHA) regulations.
-
References
Resources
- Photo Credit help wanted image by Tom Oliveira from Fotolia.com
