Contingent Workers Law and Legal Definition

Contingent workers include those who are hired through staffing firms, who are independent contractors, who work less than full-time, or whose jobs are structured to last only a limited length of time. Contingent workers are used by employers for scheduling flexibility, to alleviate overloads, accommodate one-time projects, and prevent a succession of expensive hires and traumatic layoffs. Also, employers may reduce labor costs through lower hourly wages and the absence of benefit payments.

The growth of the contingent workforce raises some new legal issues concerning employer compliance with a range of federal and state statutes, including the Fair Labor Standards Act, the Internal Revenue Code, the Age Discrimination in Employment Act, the Employee Retirement Income Security Act (ERISA), and state laws on workers' compensation and unemployment insurance. In resolving these issues, our courts often distinguish an "employee" from other workers. Some of the same federal laws that apply to long-term employees, such as the Americans with Disabilities Act (ADA), the Family and Medical Leave Act (FMLA), the Occupational Safety and Health Act (OSHA), and the Fair Labor Standards Act (FLSA), also apply to certain contingent workers.