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Global Work Glossary

Lost in a maze of global employment jargon? Find your way out with our handy collection of work and HR terminology

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Contingent Workforce

What does contingent workforce refer to?

The contingent workforce refers to the group of workers in an organization who are not permanent employees but are hired on a temporary or as-needed basis. This includes contractors and freelancers, types of workers give companies flexibility to manage resources and reduce labor costs by being able to access a diverse range of skills without needing to hire full-time staff.

Managing a contingent workforce can be slightly more complicated than overseeing regular employees. These workers are usually compensated on an hourly, weekly, or per-project basis which can confuse payroll processes and they are classified as independent contractors which means they pay their own taxes and don’t receive benefits.

It’s important to correctly classify a contingent workforce as errors can lead to penalties and legal complications. To understand whether a worker is a full-time employee or a contingent worker, companies should ask themselves how much independence the individual has to complete tasks on their own time, how long the contract is for, and whether they receive benefits.

They can also use a solution such as Multiplier for support with classification and compliance. This global payroll solution will also make paying different types of workers in one platform easy.

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