Contract work
Contract work is a broad hiring label that can describe a temporary employee, an agency assignment or an independent business engagement.
The label alone leaves important questions unanswered. A six-month assignment could place you on an employer's payroll, make you an agency employee or require you to invoice as a self-employed contractor. Each arrangement can have different responsibilities for tax, equipment, leave and insurance. Identify the contracting parties and the proposed employment status before comparing the rate with a salaried offer.
Legal status depends on the applicable rules and the working relationship. UK guidance explains that contractors can be self-employed, workers or employees. For U.S. federal tax purposes, the IRS considers the right to control how work is performed when distinguishing employees from independent contractors. A document's title does not settle that assessment. Ask about supervision, payment and who carries the financial risk of the work.
Example
A posting advertises a six-month design contract. The applicant discovers that an agency will employ and pay them, so they review the agency's employment terms alongside the client's assignment details.
What to check
- Who signs the contract and who pays you?
- Will you be an employee, an agency worker or independently self-employed?
- What covers expenses, time off, early termination and gaps between assignments?