Definition of contingent

Companies are continuously trying to maximize efficiencies and cut costs in order to increase profitability. With labour being one of the biggest expenses in business, it’s only natural that companies would start looking for innovative ways to get work done more efficiently at lower costs, which is how the contingent workforce was born.

What Is a Contingent Worker?

Contingent workers are defined as freelancers, independent contractors, consultants, or other outsourced and non-permanent workers who are hired on a per-project basis. They can work on site or remotely. However, they are not simply temp workers—this discounts the high-value nature and complexity of today’s contingent workforce. Contingent workers are highly skilled experts in their fields.

These workers are hired to complete specified tasks under a statement of work (SOW) provision. Once the project is over, they leave, though they may be called back when another project arises. As such, they are not employees of a company and the business owner has no responsibility to provide continuous work on a permanent basis.

Contingent Worker versus Employee

Contingent workers are not salaried. They do not receive benefits. They are responsible for their own taxes as they work for themselves—not the company. Therefore, the company is not responsible for deducting federal and provincial taxes, CPP, or EI.

Contingent workers also have more control over their own work than employees of a company do. They aren’t told how to complete projects or when to work. The company’s focus is not on how the work is completed but rather on the results.