Understanding Contingent Workers

If your business is facing an unplanned or short-term staffing issue, hiring a contingent worker might be the perfect stop-gap solution. But what exactly is a contingent worker? What are the benefits of hiring one? And how can you manage these temporary employees for best results?

What is a Contingent Worker?

A contingent worker — also known as a freelancer, on-call worker, independent contractor, or gig worker — is a temporary “employee” hired to fill short-term gaps in your team or provide specific skills for a one-off project.

Note: Contingent workers are considered more like consultants rather than full-fledged part-time or full-time team members, at least in the eyes of the IRS. However, not every temporary employee is classified as a contingent worker. Seasonal workers and some interns are official employees for tax and payroll purposes.

Clarifying the distinction between a contingent worker, intern, and full-time employee can be confusing. Therefore, consulting a tax professional or an attorney familiar with your business practices is advisable.

Benefits of Hiring a Contingent Worker

1) Limited or No Taxes

Unlike permanent employees, your business pays limited or no taxes for contingent workers. Freelancers and consultants are responsible for their tax portions. Although you might have to offer a higher base wage, your business won't face the tax burdens typically associated with full-time employees.

2) Flexibility

Hiring contingent workers offers significant flexibility, allowing you to scale your workforce up or down quickly to respond to market demands. This adaptability can make the difference between success and failure for your business.

3) No Need for Benefits

Benefits like health insurance and 401k contributions represent major expenses. Contingent workers generally require fewer (if any) benefits, reducing your business’s financial responsibilities to payroll alone.

4) Overtime Taken Out of the Equation

Contingent workers are typically not subject to overtime regulations, sparing your business additional costs and complexities. Any overtime will depend on the negotiation terms in their contract.

5) Valuable Expertise

Quickly secure specialized skills by hiring an expert contingent worker for particular projects instead of spending time and resources training existing employees.

How to Manage Contingent Workers

1) Create Specific Policies

Formulate policies in your employee handbook that address minimum hours worked, deadlines, work methods, and pay structures for contingent workers.

2) Include Them in All Meetings

Involve contingent workers in meetings to make them feel valued and help them integrate quickly into your company culture.

3) Encourage Them to Abide by Company Culture

Discuss your company's vision, mission, values, and norms with contingent workers to help them align with your company culture.

4) Establish an Onboarding Process

Create an onboarding process to get contingent workers acclimated to your business workflow, easing their transition and increasing their effectiveness.

5) Set Up a Contingent Worker Payroll Procedure

Investigate the laws and regulations governing contingent worker payments and establish a payroll procedure before hiring.

Scheduling Contingent Workers with Sling

Accurate scheduling is crucial for maintaining productivity and engagement for contingent workers. The Sling app offers powerful features like:

• Intuitive scheduling
• Comprehensive time-tracking (with geofencing)
• Dynamic reporting
• Time-saving payroll processing
• Customizable communication
• Effective labor-cost optimization
• And much more...

Try Sling for free and experience how it can streamline scheduling for everyone on your team, including contingent workers.