What is a contingent worker?

A contingent worker is an individual who is hired on a non-permanent basis, typically for a specific project, assignment or period of time, rather than an ongoing permanent role with a company.

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They may also be referred to as temporary workers, freelancers, or contractors. Contingent workers typically do not receive the same benefits and job security as permanent employees.

What factors may motivate individuals to pursue work as contingent workers?

There are several reasons why some workers choose to work as contingent employees: HBR’s labor research identifies contingent work as one of the fastest-growing segments of the labor market, driven by both employer demand for flexibility and worker preference for autonomy.

Flexibility: Contingent work allows individuals to choose when and where they work, and to have more control over their schedule and work-life balance.
Variety: These workers have the opportunity to work on a variety of projects and assignments, often in different industries and with different companies, which can be more interesting and engaging than working in a permanent role.
Control over earning: Some workers prefer the control and potential for higher earnings that can come with being paid on a project or contract basis, as opposed to a fixed salary.
Self-employment: Some people prefer the independence and autonomy of self-employment, and may choose to work as an independent contractor or freelancer instead of being tied to one employer.
Specialized skills: Contingent worker are often experts in their field, having specialized skills and knowledge that employers want to hire for specific projects.

It’s worth noting that it is not always a choice, sometimes due to the nature of their field or the availability of job, some workers have to take a contingent role.

Can any worker be classified as a contingent worker?

It is not always clear if an individual can be classified as a contingent worker, as there are laws and regulations in place to protect workers from being misclassified in this way.

Factors such as the nature of the work, the permanency of the relationship, the level of control, and investment in equipment and facilities, among others, must be considered in order to make a determination.

As these complexities are quite high, it is advisable to seek legal advice before determining if an individual can be classified as a contingent worker. SHRM’s talent acquisition guidance emphasizes that organizations with structured contingent worker programs fill specialized roles 40% faster than those without a defined process.

Integrating contingent workers into a broader talent strategy improves outcomes. Using pre-employment assessments alongside a structured hiring plan ensures compliance. Strong talent acquisition practices focused on skills-based hiring improve outcomes.

Frequently asked questions

A full-time employee has an ongoing employment relationship, receives benefits, has taxes withheld, and is covered by employment law protections. A contingent worker is engaged for a specific project, period, or on an as-needed basis — typically without employer-paid benefits, and with different tax treatment. The key distinction is permanence and control.

In the US, most contingent workers are not entitled to employer-sponsored health insurance, retirement contributions, paid leave, or unemployment insurance. However, independent contractors who are misclassified as employees may be entitled to these benefits retroactively. Some states (California, Massachusetts) have broader worker protections that apply to contingent arrangements.

HR must ensure proper worker classification to avoid IRS and DOL penalties, maintain accurate records of hours and pay, comply with anti-discrimination laws (which apply to contingent workers in many cases), and manage I-9 verification for all workers regardless of status. Agency-placed temps may require co-employer compliance considerations.

Common motivations include: flexibility to control schedule and location, ability to pursue multiple clients and income sources, desire for variety and challenging projects, transition between careers or after retirement, supplemental income alongside other employment, and preference for independence over organizational hierarchy.

Best practice includes: project-specific onboarding covering systems access, safety protocols, and team introductions; clear scope of work documentation; designated point of contact; inclusion in relevant team communications; and respectful workplace integration. Many organizations create a lightweight onboarding package specifically for contingent workers.

The gig economy refers specifically to the digital platform-mediated segment of contingent work — where workers find short-term engagements through apps like Uber, Fiverr, Upwork, or Task Rabbit. It is a subset of broader contingent work. The gig economy has accelerated the growth of contingent work overall and has prompted significant legislative activity around worker classification.

Contingent Worker