What Is a Contingent Worker and When to Use One
A contingent worker is a person who works for your business without an expectation of ongoing employment. Freelancers, independent contractors, consultants, agency temps, and on call workers all fall under the label.
Use one when the work has an end date, a measurable output, or needs a skill you will not use again next quarter. Keep the work that repeats every week and holds customer knowledge inside your own team.
Key Takeaways
- A contingent worker has no expectation of ongoing employment. The label covers freelancers, independent contractors, consultants, agency temps, on call workers, and seasonal hires.
- The federal government counted 6.9 million contingent workers in July 2023, or 4.3 percent of US employment, up from 3.8 percent in May 2017 (U.S. Bureau of Labor Statistics, 2024).
- The title on the contract does not decide classification. The IRS weighs behavioral control, financial control, and the relationship of the parties (Internal Revenue Service, n.d.).
- The staffing mix rule: flex the work that has a finish line, keep in house the work that sets direction, and place a dedicated remote hire on the work that repeats every week.
Table of Contents
- What Is a Contingent Worker?
- What Are the Types of Contingent Workers?
- How Many Contingent Workers Are There in the US?
- Contingent Worker vs Employee: What Is the Difference?
- Who Decides If a Worker Is Contingent or an Employee?
- When Should You Use a Contingent Worker?
- When Is a Contingent Worker the Wrong Choice?
- The Staffing Mix Rule: Keep, Flex, or Place
- Where Do Remote Latin American Hires Fit?
- How to Hire a Contingent Worker Without Creating Problems
- Conclusion
- Frequently Asked Questions
- References
What Is a Contingent Worker?
A contingent worker is someone who performs work for a business on a temporary, project, or as needed basis, with no implicit or explicit contract for ongoing employment. That last phrase comes straight from how the U.S. Bureau of Labor Statistics (2024) defines contingent jobs: work that people do not expect to last.
The word contingent means dependent on something else. The job exists because a project, a season, or a gap exists. When that condition ends, the engagement ends with it, and neither side is surprised.
Contingent workers are usually not on the company's payroll. A staffing agency, a contract firm, or the worker's own business handles their pay, which is why finance teams often track them under a separate budget line instead of headcount.
Does Everyone Use the Term the Same Way?
No. Inside HR and procurement teams, contingent workforce usually means every person who works for the company without being an employee. The BLS measures it far more narrowly, and it counts contingent status separately from alternative arrangements such as independent contracting.
The gap between the two definitions is large. Of the 11.9 million independent contractors the BLS counted in July 2023, only 4.1 percent were also contingent on that same job, because most expected their contracting work to continue (U.S. Bureau of Labor Statistics, 2024). For an employer, the broad HR definition is the useful one, and it is the one this guide uses.
What Are the Types of Contingent Workers?
There are six common types of contingent workers. Each one changes who pays the worker, who directs the work, and how long the arrangement lasts.
The type matters because it sets your obligations. An agency temp is the agency's worker, so the agency runs payroll. An independent contractor is a separate business, so the contract and the way you manage the work carry the weight.
How Many Contingent Workers Are There in the US?
The most recent federal count found 6.9 million contingent workers in July 2023, or 4.3 percent of everyone employed in the United States. The survey before that, run in May 2017, put the share at 3.8 percent (U.S. Bureau of Labor Statistics, 2024).
Source for every figure in the table: U.S. Bureau of Labor Statistics (2024), Contingent and Alternative Employment Arrangements, July 2023.
Two findings matter for anyone hiring. Contingent workers are split on the arrangement: 44.8 percent would have preferred a permanent job, while 40.8 percent preferred their contingent setup. Independent contractors lean the other way, with 80.3 percent preferring to stay independent (U.S. Bureau of Labor Statistics, 2024).
The hiring read is simple. A freelancer who chose freelancing may stay with a good client for years. A temp who sees the role as a stopgap is more likely to leave the moment a permanent offer appears. Know which one you are bringing in before you plan around them.
Pay and benefits differ too. Among full time workers, contingent workers earned a median of 838 USD a week, 74 percent of the 1,137 USD earned by noncontingent workers. Only 19.9 percent of contingent workers had employer provided health insurance, against 51.2 percent of noncontingent workers. The BLS notes the pay gap partly reflects differences in age and occupation (U.S. Bureau of Labor Statistics, 2024).
Contingent Worker vs Employee: What Is the Difference?
The difference between a contingent worker and an employee comes down to control and continuity. An employee works under the company's direction with an expectation that the job continues. A contingent worker covers a defined need and controls more of how the work gets done.
Read the table by row, not by column. No arrangement wins everywhere. The right answer depends on whether the work in front of you needs continuity or needs speed.
Who Decides If a Worker Is Contingent or an Employee?
The facts of the working relationship decide, not the title on the contract. For federal employment taxes, the IRS applies the common law rules and weighs all evidence of control and independence across three categories (Internal Revenue Service, n.d.).
- Behavioral control: whether the business has the right to direct what work is done and how it is done, through instructions, training, or other means.
- Financial control: whether the business controls the financial side of the job, including how the worker is paid.
- Relationship of the parties: the written contract, any benefits, and how permanent both sides expect the relationship to be.
When a business is unsure, it can file Form SS-8 and ask the IRS to determine the status of a specific worker (Internal Revenue Service, n.d.). Wage and hour law and state law can apply different tests, so a worker can look like a contractor under one standard and an employee under another.
A plain warning sign: if you train the person on your internal process, set their hours, and expect them to stay indefinitely, the arrangement starts to look like employment no matter what the contract calls it. Talk to an employment attorney before you convert a role.
When Should You Use a Contingent Worker?
Use a contingent worker when the work has a clear end, a measurable output, or needs a skill your team will not use again soon. Six situations pass that test.
- A project with a finish line. A website migration, a CRM cleanup, or a one time data project ends, and the cost should end with it.
- A seasonal peak. Tax season at an accounting firm or a spring listing rush at a brokerage needs extra hands for weeks, not years.
- A specialist skill you need once. A pricing study or a security review calls for senior judgment you would not keep on payroll.
- Coverage for a leave. Parental leave or a medical absence leaves a seat open for a known period.
- Backlog cleanup. Thousands of untagged CRM records or months of unreconciled transactions can be cleared by one focused contractor.
- A test before a commitment. A short engagement shows whether a function produces enough return to justify a permanent seat.
The common thread is a known end. If you cannot describe when the engagement finishes and what done looks like, the work is probably not contingent work.
When Is a Contingent Worker the Wrong Choice?
A contingent worker is the wrong choice when the work repeats every week, holds customer relationships, or depends on knowing how your business runs. Short engagements turn those roles into a loop of hiring, training, and losing the same knowledge.
Take an appointment setter calling your leads. The results come from knowing your offer, your common objections, and your calendar. Replace that person every three months and you pay for the learning curve four times a year.
The same holds for a transaction coordinator, a bookkeeper closing the books each month, or an executive assistant running an inbox. These seats compound. Each month in the role makes the next month more productive, which is the opposite of what a contingent arrangement is built for.
O'Brien (2025) argues that practical, demonstrated skill tells you more about a remote hire than credentials on paper. Skill built inside your own business is the clearest version of that, and it walks out the door when a short contract ends.
The Staffing Mix Rule: Keep, Flex, or Place
The staffing mix rule sorts every function by two questions. Does the work repeat every week? Does it hold knowledge that is hard to replace? The answers put each function into one of three buckets: keep it in house, flex it with contingent workers, or place a dedicated remote hire.
The last row is where growing companies most often go wrong. They treat daily operating roles as contingent because they want a lower cost, then lose the knowledge each time a contract rolls over. A dedicated remote hire who works only for you, during your hours, fixes the cost problem without breaking continuity.
If you are weighing how to bring in outside help at the function level, the comparison of staff augmentation vs outsourcing vs managed services covers which model fits which kind of work.
Where Do Remote Latin American Hires Fit?
A dedicated remote hire from Latin America sits between a contingent worker and an employee. The person often works as an independent contractor, yet for one company, full time, inside its tools, and with the expectation of a long relationship.
The cost case is why most companies look at the region. Remote Latinos lists an appointment setter in Latin America at about 1,200 USD per month, compared with 3,500 to 5,000 USD per month for the same role in North America (Remote Latinos, n.d.). Colombia runs on Eastern or Central time depending on the season, so the workday overlaps.
Time zone overlap is the reason nearshore staffing works for daily operating roles in a way that overnight offshore work does not. The person answers the lead, the client, or the agent while the conversation is still live.
Cross border contractor arrangements raise their own tax and labor questions in both countries. Confirm the setup with an advisor before the first payment, and write the agreement around the outcomes you expect, not only the hours.
Owners who build a team of vetted remote professionals usually start with the seat that hurts most. The top roles to hire for remote teams are the daily operating seats from the last row of the table above: setters, coordinators, assistants, and bookkeepers.
How to Hire a Contingent Worker Without Creating Problems
Hiring a contingent worker well takes six steps, and most of the trouble companies run into comes from skipping the first and the last.
- Write the outcome and the end date first. A scope that names the output and the finish line keeps the engagement contingent in fact, not only on paper.
- Put it in a statement of work. List what will be delivered, by when, how it will be accepted, and what triggers payment.
- Decide classification before the first task. Check the arrangement against the three IRS categories while it is still easy to change (Internal Revenue Service, n.d.).
- Agree on payment terms and invoicing. Contractors invoice for their work; employees go through payroll. Mixing the two is a red flag.
- Protect your data and work product. Use a confidentiality agreement, assign intellectual property in writing, and set system access to expire with the contract.
- Plan the handoff on day one. Make documentation part of the paid scope, so the knowledge stays when the person leaves.
Step six is the one most often skipped, and it is the reason contingent work feels expensive months later. Pay for the documentation inside the contract and the knowledge stays with you.
Conclusion
A contingent worker is anyone who works for your business without an expectation of ongoing employment. They are the right tool for work with a finish line: projects, seasonal peaks, leave coverage, and specialist skills you need once.
They are the wrong tool for the weekly work that keeps the business running. For those seats, keep the person and change the cost structure instead. The client testimonials from companies running dedicated remote teams describe that shift in their own words.
Remote Latinos places vetted Latin American professionals who work US hours inside your own systems. Book a discovery call to sort your roles into keep, flex, and place.
Frequently Asked Questions
What is a contingent worker?
A contingent worker is a person who works for a business without an expectation of ongoing employment, such as a freelancer, independent contractor, consultant, agency temp, or on call worker. The engagement exists for a defined project, season, or gap and ends when that need ends.
What does contingent worker mean?
Contingent means dependent on a condition. A contingent worker's job depends on a defined need, so the work continues only as long as the need does. The BLS describes contingent jobs as those with no implicit or explicit contract for ongoing employment (U.S. Bureau of Labor Statistics, 2024).
What is contingent work?
Contingent work is any arrangement that is temporary or not expected to last: project contracts, seasonal jobs, agency assignments, and on call shifts. In July 2023, 4.3 percent of US workers held a contingent job as their sole or main job (U.S. Bureau of Labor Statistics, 2024).
How does a contingent offer work?
A contingent offer is a different concept. It is a job offer that becomes final only after the candidate clears set conditions, such as a background check, reference checks, a drug test, or proof of work authorization. The role itself can be permanent; only the offer is conditional.
Is an independent contractor a contingent worker?
In everyday HR usage, yes, since contractors are not employees. In federal statistics, not necessarily. The BLS measures contingent status and alternative arrangements separately, and only 4.1 percent of independent contractors were also contingent on the same job in July 2023 (U.S. Bureau of Labor Statistics, 2024).
References
Internal Revenue Service. (n.d.). Topic no. 762, Independent contractor vs. employee. https://www.irs.gov/taxtopics/tc762
O'Brien, G. (2025, February 5). How to find elite global talent: Best practices and mistakes. Remote. https://remote.com/blog/recruit-hire/remote-recruitment
Remote Latinos. (n.d.). Why and who is Remote Latinos [Sales presentation].
U.S. Bureau of Labor Statistics. (2024, November 8). Contingent and alternative employment arrangements: July 2023 [News release]. https://www.bls.gov/news.release/conemp.nr0.htm
