In the United States, Contingent Worker Payroll refers to the tasks a company must execute to ensure temporary W2 Workers and 1099 Independent Contractors (ICs) are paid correctly and on time in accordance with their contract or Statement of Work (SOW).
The contingent workforce is on the rise as the employers take a more flexible approach to employment. In fact, a recent Gartner survey revealed that 32 per cent of companies in the United States are replacing full time employees with contingent labor as a cost-saving measure.
The truth about the contingent workforce
Yet, while engaging contractors comes with many benefits, operating a contingent workforce payroll program, regardless of your program model, is often complex and confusing to employers who must stay compliant or risk legal, financial and reputational damages to their company and employer brand.
As such, if your company is considering engaging contractors, it’s critical to understand the legal and tax obligations that come with operating a contingent workforce and the common misconceptions surrounding contractor payroll.