Contract Jobs- What does that mean?

Mar 13th, 2015
Contract Jobs- What does that mean?

What does a contract job mean anyway?

Contract jobs are short-term jobs where a company hires you temporarily for a short time or a small project.

Companies hire such workers, called contractors, if they feel the worker is required only for a short duration. So instead of hiring you as a full-time employee and having to fire you a few months later, the company instead hires you under a temporary ‘contract’ so you, the contractor know upfront that this is a temporary arrangement.

For example - A video game maker needs to test its game to find bugs before releasing it to the market. While the game is being developed the company only needs a few testers since they only test a few new things developed each day, so it employs a few testers as full-time employees as they are needed on an ongoing basis. However right before the game launches, the company needs to make sure that the entire game (instead of individual features) works flawlessly. This requires a lot of extra manpower for a short period of time. Thus, the company hires these extra testers as contractors for a few weeks or months to augment their full-time test team.  
 

Controversy about contract jobs

There is a lot of debate in the US and abroad about whether contract jobs are good or bad. Companies claim contract workers are required as businesses have changing demands and need flexibiliy to hire and let go workers quickly. Opponents claim it is a way for companies to avoid paying benefits and job stability to its workers.

There are also incredibly complex and unclear labor and tax laws that are not clear who can or cannot be considered an employee vs a contractor. Although companies can hire contractors under a ‘contract’, there are some IRS rules that can override the 'contract' and dictate if a worker should be classified as a contractor or full-time employee. These rules rely on factors such as the amount of control the client has over the worker, etc. which can be misinterpreted by different people.

This misinterpretation of Independent Contractor (also called 1099) rules has led to various lawsuits where companies have been penalized for misclassifying workers, which has made them shy away from discussing their use of contingent workers or adding a layer of middlemen to insulate themselves from such co-employment or tax claims.



Contracting is notoriously non-transparent and many contractors just luck out in getting jobs or have been in the system long enough to know how it works. OnContracting wants to change that. We empower job seekers with information so they can take job search into their own hands. Get started in finding your next contract job by creating your profile on OnContracting.

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