Despite some disadvantages, both the worker and the company benefit from the contingent workforce. The nature of the contingent employment allows for flexibility on both sides. Not only does it allow more freedom for contingent workers, but it also provides financial benefits for the employer.
There are varieties of reasons why a company would prefer contingent workers. Since contingent workers are not permanent, the workforce can rise and fall according to the workload. Hiring a contingent worker is also a tax deduction as it is considered an expense, especially if a staffing firm manages the workers. In addition, employers do not have to pay payroll taxes, unemployment taxes or benefits for these workers, which can save the business money.
For an employee working as a contingent worker allows for a better work-life balance. Many positions allow for remote work and flexible hours. Additionally, because the nature of the work is temporary, the person can move from job to job without it being negative on their resume. It can also give someone the opportunity to work in a variety of industries and gain valuable skills that can turn into a permanent position in the future.
It is important for a business and its human resources department to correctly classify the contingent worker, even if the worker is not full time. According to guidelines by the Department of Labor, an independent contractor is different than a temporary employee. While the business does not have to offer benefits to a temporary worker, they do have to follow other employment laws that pertain to permanent employees, such as overtime pay and minimum wage.
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