Contingent work by definition is a conditional and transitory employment arrangement, conducted at a particular place, at a particular time. Assignments are typically tied to an increased demand for a particular service or product or technology. Contingent work can be performed under a number of different contractual arrangements, including workers provided by staffing agencies, freelancers (also known as independent contractors), or outsourcing of projects to third-parties.
Earlier, the use of contingent workers grew in times of economic uncertainty and reduced when the economy returned to more prosperous times. However the current economic recovery presents a marked difference to this pattern. The use of temporary workers continues to grow apace, showing no signs of any abatement.
Against this background, let us look at the various aspects of temporary workers that a novice to their use might be interested in knowing more about.
Duration: The Department of Labor defines temporary appointment as work that has a specific expiration date and lasts one year or less, offering variable hours and no job security.
Nature of Work: Is seasonal and irregular, ending with completion or termination of a specific project. It is performed through temporary, contracts as opposed to long-term and stable employment. Freelancers are considered self-employed which agency-supplied contractors are W-2 employees of the staffing agency for the duration of the engagement. The staffing agency holds the agreement with the entity requesting the worker. Temporary help agency workers may establish a long term relationship with their staffing agency but their employment, hours, and pay will vary with the availability of assignments.
Number of Hours: Though the Fair Labor Standards Act (FLSA) does not define a specific number of hours, the usual definition of full time work looks at it as 40 hours, where as temporary and part-time work involves 28 to 32 hours; with an eye to the tenets of the Affordable Care Act. The hours worked are not limited for anyone over 16 years, but many states have their own rules, restricting the type of work done by anyone less than 18 years of age.
Minimum Wage: Businesses covered by the FLSA have to pay the federal minimum wage to their temporary workers, or the wages set by their state or local jurisdiction, if they are higher than the federal minimum wage.
Overtime: Overtime needs to be paid at the rate of one and a half times the regular rate of pay for hours over 40, worked in a week. The only exemption applies to workers who are paid by commission.
Pay Day: Some companies pay their contingent workers on a daily basis, while others pay weekly or once in two weeks or other pay cycles. Few lawmakers looked at this situation, until California State (which has many other regulatory requirements to protect contingent workers) considered it in 2009. This law requires employers to ensure that day-to-day work gets paid on a daily basis, while workers who put in longer terms are paid on a weekly basis for work lasting less than 90 days. If a contingent worker decides to leave the job, the dues will have to be paid within 72 hours.
Regulatory Environment: When hiring workers as temporary workers, there are some regulatory requirements stipulated by the Wage and Hour Division (WHD) of the Department of Labor (DOL) an employer needs to comply with, in regard to the wages paid, overtime pay, recordkeeping, and child labor provisions and jobs which are deemed hazardous for youths between 16-18.
The Fair Labor Standards Act (FLSA) does not define full-time employment or part-time employment or limit the number of hours worked by anyone over the age of 16. It only requires employers to pay covered non-exempt employees at least the federal minimum wage for all hours worked, and overtime pay for all hours worked over 40 in a work week. The FLSA does not have a say in deciding the work hours of an employee or schedule pay rises, nor does it prescribe additional pay for work during weekends or nights.
Identify the non-core operations of your business which can be assigned to contingent workers and enjoy the benefits of getting the work done faster, by skilled workers at better prices; while ensuring that your “permanent employees” focuses on your core operations. Many companies also depend on contingent workers as a source of critical skills that are only needed for a short period of time or for a particular project. Enjoy the flexibility in hiring, saving time.
Using extended workforces for human capital needs is a very successful strategy being adopted by more employers, and if you have never tried it for any reason, now may be a good time to shed those inhibitions.
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