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What Is Contingent Employment?

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  • Written By: Jessica Ellis
  • Edited By: Bronwyn Harris
  • Last Modified Date: 27 August 2016
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Contingent employment is a short term or on-call job that does not require the creation of a long-term contract between an employer and worker. There are many different types of contingent employment, including seasonal work, project-based jobs, and on-call positions. While contingent employment can be economically and practically useful for both employers and workers, some economic experts believe that it can also be used to cover a multitude of legal and moral infractions.

The most important distinction between contingent employment and a traditional job is the creation of a short-term contract. In a traditional job, workers are typically hired without an end date in mind, though both employer and employee retain the right to end the arrangement at any time. In a contingent job, the contract usually specifies a term of employment, which may be a project completion date or the turning of a season. Some contingent employees may be hired as permanent employees at the end of their short-term contract, at which point they usually sign a new contract as a full-time worker.

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Contingent employment contracts can be useful in a variety of situations, but are most frequently used to increase workplace productivity during highly active time periods. Seasonal workers, for instance, may be hired at retail stores during the weeks leading up to the holiday season, to compensate for larger crowds. In the agricultural industry, seasonal workers may also be hired during planting or harvesting season, to ensure maximum efficiency during these crucial periods. Project-based workers, such as freelance construction workers or film crew, may be hired on a contingency basis to complete a specific job. On-call workers may have a longer contract period than other contingency employees, but may still qualify for contingency status based on the limited hours of actual work available.

Some businesses find it economically sound to offer contingency employment rather than traditional, full-time jobs. A farm, for instance, may not need 50 workers year-round, but may be in desperate need of 50 workers during the harvesting season. Using contingency employment can help cut down on wasteful spending by ensuring that salaries are only paid when work is required and completed.

Unfortunately, some research shows that contingency employment contracts are often used to skirt tax and employer contribution requirements, and can take advantage of workers desperately in need of a job. Unscrupulous employers may keep a contingent workforce on staff full time, but only offer a series of short-term contracts instead of transitioning to full-time agreements. This method allows the employer to avoid contributions to Social Security, health benefits, or worker's compensation funds.

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