Contingent worker
Contingent worker is an umbrella label for people who work for a business outside a permanent, ongoing employment relationship.
Contingent describes the expected duration and attachment of the work, never the legal classification. Payroll has no contingent tax treatment. Each contingent worker resolves into one of two positions: a W-2Form W-2. Form W-2 is the annual wage and tax statement you give employees and file with the Social Security Administration, reporting wages paid and taxes withheld.Click to open the term employee of some employer, or a self-employed independent contractor. That employer may be the business itself or a staffing firm. The applicable test decides which, and the answers can differ for the same person. Choosing the label first and the classification afterwards is how misclassification liability accumulates quietly.
How is each contingent type paid?
Every type below gets its classification decided separately, on its own facts. Temporary is not a classification either: a six-week hire onto your own payroll is an employee with a short expected tenure. Payments split across Forms W-2 for employees and Forms 1099-NECForm 1099-NEC. Form 1099-NEC is the IRS information return you file to report nonemployee compensation: payments for services to an independent contractor or other nonemployee.Click to open the term for contractors. One person can legitimately appear in both across a single year.
| TYPE | WHAT IT DESCRIBES | PAID AS |
|---|---|---|
| Temporary employee | A role for a limited, defined period, such as covering a leave or a project | Your W-2 employee, an agency’s W-2 employee, or less commonly a contractor |
| Seasonal employee | A role tied to a recurring cycle of demand, such as a holiday season or a harvest | Typically a W-2 employee |
| Locum tenens | A clinician temporarily filling in for an absent provider | A W-2 employee or an independent contractor |
- Independent contractor (self-employed) or employee?
- 29 CFR Part 795, Employee or Independent Contractor Classification Under the Fair Labor Standards Act
General information, not legal or tax advice. Apply current federal and state rules with qualified guidance.