June 15, 2021
June 22, 2021
Contingent workers and contract employees are an integral part of the US workforce. In 2017, for instance, there were 6 million documented contingent workers in the USA.
Of course, when hiring these types of workers, you’ll need to follow the right regulations.
Otherwise, you could open yourself up to legal scrutiny and (potentially) some hefty fines. Which, frankly, isn’t ideal.
Fortunately, today’s your lucky day. We’ve done some of the legal diggings for you.
Before we dive into the legalities, let’s first define what we mean by contract employees and contingent workers. (Trust us, understanding the difference is important.)
Contract employees, as the name suggests, hold a contract with the employer. As such, they fall under their direct supervision. This means their employer is liable for handling workers’ compensation and employee benefits. Any other benefits are determined by the job contract.
A contingent worker is often an independent contractor, freelancer, outsourced consultant or temporary worker. Companies typically bring them in to fill capacity or skill needs. Unlike contract employees, businesses do not recognize them as employees.
American hiring and employment laws are an absolute minefield. One foot out of line and boom.
That’s why it’s important to research the appropriate regulations.
Here are a few to get you going:
‘Okay,’ we hear you say, ‘and what happens if I fail to achieve compliance?’
Well. Let’s dig into that.
If an employer misclassifies a worker for tax reasons or because of a misinformed judgment, they could face legal backlash.
This is something Uber (UK) faced in 2021.
After a grueling legal battle, courts determined Uber drivers were in fact employees, not independent contractors. This, of course, would entitle them to minimum wage pay, holiday pay, and rest breaks.
Uber must now calculate compensation for the 25 drivers who came forward. Unlucky.
Who knew employment regulations could be so hideously confusing?
We hope our overview has offered you some clarity into the laws surrounding contract employees and contingent workers. But, please bear in mind that we’ve only skimmed the surface.
There’s a whole world of regulation fine print to read out there. And, really, the best way to ensure complete compliance is to seek the appropriate legal consultation.
We wish you well on your quest!