What is Flexible Staffing and How Does it Help Organizations?
Gone are the days where every employee at an organization works full time on the same schedule and number of hours. Flexible staffing has grown in popularity, and for good reason--it allows employees greater autonomy over their work and schedules and it allows organizations to fulfill their staffing needs. From contingent workers to part time employees, find out more about flexible staffing and whether or not it could work for your organization.
What is Flexible Staffing?
Flexible staffing is an umbrella term to describe hiring workers who aren’t traditional full-time employees. In other words, flexible staffing involves contracting nontraditional workers like part time and seasonal employees, contingent workers, and gig workers and independent contractors.
Defined: Independent Contractors, Contingent Workers, and Gig Workers
An independent contractor is a self-employed individual, business, or corporation that provides services to another individual or business under the terms laid out in a contract. They are not considered employees, as they work only when required.
According to the U.S. Bureau of Labor Statistics, “Contingent workers are people who do not expect their jobs to last or who report that their jobs are temporary. They do not have an implicit or explicit contract for continuing employment.”
How Flexible Staffing Can Help Organizations
Companies often use flexible staffing to hire workers to complete specific projects or duties in a certain timeframe, without having to hire a full time employee and take on the cost associated with that process.
Examples include seasonal workers who staff stores and businesses during the holidays or experts in a particular field to provide expertise to a company for a specific amount of time. In some of these cases, the organization who hires temporary employees doesn’t necessarily have to worry about payroll duties if they’re working with a contracting or staffing agency, saving HR teams both time and energy.
What is the Difference Between Flexible Staffing and Full Time Work?
The differences between an independent contractor and an employee are varied but vital, particularly legally. According to the IRS, “you are not an independent contractor if you perform services that can be controlled by an employer.”
For example, a company might pay a contractor and an employee for the same or similar work, but if the employer has the “legal right to control the details of how the services are performed,” then an employer-employee relationship exists.
Additionally, companies are required to withhold taxes, Social Security, and Medicare for wages paid to employees but not contractors. Likewise, employment and labor laws do not apply to independent contractors.
Why is it Important for Employers to Know the Differences?
For an employee’s wages, organizations are required to withhold taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax. Conversely, as the IRS puts it, employers “do not generally have to withhold or pay any taxes on payments to independent contractors.”
Not knowing this distinction could create compliance concerns for organizations, including owing employment taxes for misclassified employees. Not to mention the headache caused for the worker(s) in question who will be required to file Form 8919 to determine uncollected taxes on their wages.
Likewise, according to the Equal Employment Opportunity Commission (EEOC), employment and labor laws do not apply to independent contractors. Still, employers should adhere to regulations that prevent discrimination to avoid potentially harmful litigation—and boost recruitment and retention.
Additionally, during the final days of the Trump administration, the Department of Labor (DOL) issued a ruling that was designed to implement an “economic reality” test to determine the independent contractor status of a worker. However, after a change in presidential administrations in January 2021, the clarification has been withdrawn in an announcement from the DOL in May 2021. Read more about the update here.
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