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What are Contract Workers?

By Erin J. Hill
Updated Jan 24, 2024
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Contract workers are generally self-employed individuals who are given a specific job to do during a set amount of time. In most cases, a contract outlining all aspects of the project, including time frames and payment, is signed by by the worker and employer. Common examples of such workers are those in the construction field and freelancers.

In construction, contract workers are often hired by a middleman, commonly known as a contractor. The contractor is hired by a homeowner or real estate developer and is paid to hire and manage multiple or subcontractors on contract. Each worker is usually responsible for one portion of the overall project, which may include electrical, carpentry, flooring, and drywall work-among others. Typically, contractors must be licensed in their field in residential construction, commercial construction, or both. The subcontractors may need a license and insurance, or not, depending on specialty.

Freelance workers also typically work on contract. These individuals do not often work for a contractor, but instead negotiate directly with the company or individual requiring the services. Freelancers may be writers, artists, planners or computer programmers. Virtually any self employed person can be a contract worker.

Businesses who hire a contract worker or freelancer often do so because it is less expensive than dealing with a larger firm or organization. For example, hiring an ad agency to perform graphic design tasks is usually much more costly than hiring a contracted freelance designer. Hiring a full time worker also may not make economic sense, since there might not be enough regular work to keep the individual busy. For their part, freelancers can generally earn more money working as individuals who are self-employed than is possible while working for an employer.

The regulations that govern this type of worker depend greatly on location and industry. Many workers must have a degree or specific licensing in order to operate while others simply need to learn the field in which their business is categorized. Anyone considering becoming a contract worker should learn all laws and requirements for operating before taking any assignments. This can include filing taxes, obtaining business licenses and other documentations, and any requirements for performing the actual work.

Since they are self-employed, contract workers must regularly market their services to potential customers and clients. Newspapers, ads, sales letters, and the Internet are effective means of doing this in most industries. It is also necessary, since most freelancers are one-person operations, for them to build relationships with clients in order to get good referrals for future work.

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Discussion Comments

By anon315094 — On Jan 21, 2013

I'm wanting to respond to an advert for a qualified painter in christchurch. The word qualified is putting me off because I'm not registered as a painter but I do have the skill and the experience. It's how to sell myself so I land this contract is what's getting to me.

By Vaclav — On Apr 27, 2011

@DFMeyers- I know exactly what you mean. My husband does temporary contract work because that is all there is in the area we live in. However, my mother-in-law is always saying he needs to get a real job. It is hard to get a real job when there is none where you live. All that is important is that we are able to pay our bills and that we are happy. We are satisfied with his contract work and feel blessed.

By DFMeyers — On Apr 24, 2011

I have done a variety of contract work over the years. My favorite has been writing. Writing articles for publications and businesses is rewarding. I love working for myself and not having a boss. I can control the amount of work that I take on. I have family members that sometimes make remarks about how my jobs are "undependable". I remind them that many people with "dependable jobs" have lost them due to recessions.

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