The term casual employee is not a familiar one to many Americans. Instead we tend to see the terms "temporary worker" or "independent contractor" in place of “casual employee.” Defining what a casual employee is can get somewhat confusing, since the term can differ from country to country.

In the US, the term casual employee is often used in universities. It refers to people, often students, who work less than 1000 hours per 12-month calendar year, on an irregular, infrequent or “as-needed” basis.” Because the worker is considered a casual employee, he or she does not have access to benefits like worker’s compensation, disability, company retirement plans, or health insurance.

According to IRS code, if the casual employee works more than 1000 hours in a year, the employee must be reclassified. The employer must then contribute part of worker’s compensation and disability payments. Restrictions on participating in company health plans or retirement plans may still apply to the “regular” part time worker.

Alternately, when the term casual employee is used in place of the term “independent contractor” in the US, it refers to a person who can work as many hours as he or she likes for a company, or for multiple companies. The burden of obtaining health insurance, paying social security and worker’s compensation wages are fully on the independent contractor. Further, the independent contractor or casual employee has no expectation of continued work with a company. At any time, the company may choose to no longer employ the casual employee, and not be responsible for providing unemployment benefits.

It can get somewhat confusing when a person who works for a temporary agency is considered a casual employee in the US. Generally, if a person consistently works for a temporary agency, he or she gains access to health insurance, and any company retirement plans. It doesn’t matter how many places the person works as long as the work is consistent and exceeds 1000 hours in a calendar year. Technically, the temporary worker is not a casual employee because he or she is not employed by the companies he is providing temporary work at, but instead by the temp agency.

In other countries, some people who work regular hours at jobs can choose to be a casual employee instead of a full-time permanent worker. Again, they are usually responsible for paying whatever taxes the country requires, but they normally work at a higher pay rate. This is the case with many manufacturing employees in Australia, where many people choose to be designated as a casual employee in order to have higher pay. Like the independent contractor in the US, the onus of paying any taxes or money for state services is the responsibility of the casual employee and not the employer.