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What is a contingent worker?

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A contingent worker is someone who isn’t a permanent member of staff, but rather has been hired on a temporary or contractual basis. These workers are brought in to complete a specific task.

The payment process for contingent workers tends to be a bit different compared to payments made to employees. Payments can be made per project, on an hourly basis, or with daily rates. Payments made to contingent workers are more complicated than paying permanent employees because companies need to take different factors into consideration, depending on what country the contingent worker is based in.

Examples of contingent workers

Contingent workers can be freelancers, consultants, independent contractors, or seasonal employees – among others.

Usually, they’re brought in to take on a specific task or offer specialized expertise or skills to meet a temporary or emerging challenge.

Difference between contingent worker, employee, and contractor

The definitions of contingent worker, employee, and contractor can sometimes blur. Below is a brief description of each:

Contingent worker: Someone brought in temporarily to handle specific projects or tasks, usually hired through a third-party agency and paid either hourly, daily, or by project.

Contractor: A self-employed person or business that provides services to a company on a contractual basis. Contractors are in charge of their own insurance taxes and benefits, and they charge a flat fee for their services. They choose how they complete their work, the hiring company can only direct in

Employee: A permanent member of staff paid through a salary or an hourly wage who receives benefits like health insurance and paid time off from the company.

Managing contingent workers with a global workforce

Paying contingent workers across a global workforce can get tricky. Differences in labor laws, taxes, regulations, and currency exchange rates can be a major challenge for companies.

It’s complicated enough managing these things in one country – dealing with them in several can be complex on a whole other level.

Then there’s data security and privacy. Many countries have different data privacy laws and regulations. Businesses must make sure they’re complying with these.

Finally, there’s managing different payment method preferences, which tend to vary depending on the contingent worker’s location. Juggling these preferences can become a convoluted process and may cost the company time and money.

Global payroll platforms can come to the rescue with the following services:

  • Global regulatory expertise
  • Cross-currency transaction capabilities
  • Data management that allows for visibility, tracking, and automation
  • A safe and secure platform
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