Managing a contingent workforce

How to plan, hire, schedule and manage temporary, seasonal, on-call and contract workers alongside your core team, and the legal risks to watch.

In shortA contingent workforce is the people who work for you without being permanent employees on your regular payroll: temporary workers from a staffing agency, seasonal hires, on-call or per-diem staff, and independent contractors. Managed well, they let you match labor to demand. The keys are planning when you need them, classifying each worker correctly, clarifying responsibilities with staffing agencies, onboarding them quickly and tracking their hours as carefully as your core team’s.

Who is in a contingent workforce

Types of contingent workers
Type Who employs them Typical use
Agency temps The staffing agency, often with your business as a possible joint employer Peaks, absences, short projects
Seasonal employees Your business Holiday retail, summer hospitality, harvest
On-call or per-diem staff Your business Fill-in shifts in healthcare, events, security
Independent contractors Nobody; they run their own business Specialized or project work they control
Gig or platform workers Depends on the platform and the law Delivery, short tasks

The labels matter less than the facts. A seasonal hire or on-call worker on your payroll is your employee with full wage and hour rights. A worker you call an independent contractor may legally be an employee. See seasonal employee, temporary employee and blended workforce.

When contingent workers make sense

They make less sense for work that is ongoing, central to your business and directed by your managers every day. That pattern looks like regular employment, and it is usually cheaper and more stable to hire.

Plan demand before you hire

Start from data. Look at last year’s hours by week and location, upcoming events and your current team’s availability. The gap between the hours you need and the hours your core team can cover is your contingent need. Our workforce planning guide and the staffing calculator walk through it.

  1. Forecast hours needed by week and role.
  2. Subtract the hours your core team can reasonably work without heavy overtime.
  3. Decide which part of the gap is better filled by overtime, part-time hires, seasonal hires or an agency.
  4. Book agencies and start seasonal hiring early enough to train people.

Classification: the biggest legal risk

Misclassifying an employee as an independent contractor can lead to back wages, unpaid overtime, back taxes, penalties and benefits claims. Federal agencies and courts look at the economic reality of the relationship: who controls the work, whether the worker has a real opportunity for profit or loss, whether they invest in their own business, how permanent the relationship is and whether the work is integral to your business. Several states use a stricter “ABC test.” If you direct when, where and how someone works, treat them as an employee. Read independent contractor vs employee before engaging contractors.

Working with staffing agencies

With agency temps, the agency is usually the employer of record and runs payroll, but your business may share responsibility as a joint employer for some legal obligations, especially workplace safety and, in some situations, wage and hour compliance. Put responsibilities in writing:

Agency agreement checklist
Topic Who is responsible
Payroll, taxes and workers’ compensation Usually the agency; confirm in writing
Site-specific safety training and PPE Usually your business; OSHA expects both to protect temporary workers
Timekeeping and approval of hours Agree who records hours and who approves them
Overtime Agree how overtime is authorized and billed
Discipline and removal from assignment Agree the process and who communicates
Conversion to permanent hire Check any conversion fees

Onboarding contingent workers fast

Short assignments still need good onboarding. A temp who does not know the safety rules or where to clock in is a risk on the first day. Prepare a short version of your onboarding:

See how to onboard seasonal employees for a fuller checklist.

Scheduling a blended team

Contingent workers should fit into the same schedule as everyone else, so managers can see total coverage and labor cost in one place. Give core employees first choice of preferred shifts where that is your policy, fill the rest with seasonal, on-call or agency staff, and keep an on-call list for last-minute gaps. Watch hours closely: seasonal and on-call employees on your payroll earn overtime like anyone else, and some cities’ scheduling laws cover part-time and temporary staff.

Tracking hours and cost

Track every contingent worker’s hours accurately, even if an agency pays them. Agency invoices are based on hours, and disputes are common when nobody recorded them. Compare the cost of each option per productive hour: agency bill rate, seasonal wage plus burden and training time, or overtime for core staff. Our overtime vs new hire calculator helps with the comparison.

Keeping good contingent workers coming back

The best seasonal and on-call workers are valuable because they already know your business. Treat them as part of the team: include them in announcements, recognize good work and invite them back early for the next season. A returning seasonal worker needs far less training than a new one.

Common mistakes

How EZTime helps

EZTime lets you add seasonal, on-call and temporary staff to the same schedule as your core team, post open shifts, and record hours from a phone, kiosk or NFC tag. Hours can be tagged by job or client, which makes agency invoices and project costs easy to check.

Frequently asked questions

What is a contingent worker?

Someone who works for a business without being a permanent employee on its regular payroll, such as an agency temp, seasonal hire, on-call worker or independent contractor.

Are seasonal workers entitled to overtime?

Yes, if they are non-exempt employees. Seasonal status does not change wage and hour rights.

Can a business be responsible for agency temps?

Yes, in some situations. Host employers share responsibility for safety and may be joint employers for other obligations.

How do I know if someone is a contractor or an employee?

Look at the economic reality of the relationship, including control, investment, profit or loss and permanence. Some states use a stricter test.

Should temps be on my time clock?

It is a good idea to record their hours yourself, even if the agency runs payroll, to check invoices and manage coverage.

Where to go next

More on this topic

One schedule for your whole team

Core, seasonal and on-call staff on the same EZTime schedule. There is a $20 monthly minimum; above that, plans start at $2 per employee.

Disclaimer: This guide is general information only and is not legal advice. Worker classification and joint employment rules depend on the facts and on federal and state law. Talk to a qualified employment attorney.