Definition of a Temporary Contract
The definition of a temporary contract is an agreement to work for an employer for a specific time, such as over the summer or for another busy season.3 min read
The definition of a temporary contract is an agreement to work for an employer for a specific, limited amount of time, such as during the holidays, over the summer, or for another busy season. In some cases, employees who sign a temporary contract may be able to transition to permanent employment when the contract term expires.
Purpose of Temporary Employment
Companies often rely on temporary employees for project completion, to fill in when a permanent employee is on vacation or maternity leave, or when funding to hire a full-time employee is not available. Sometimes these employees are called temps or seasonal employees. In some instances, temporary employees are used when your business needs expertise beyond that of your existing employees, such as for a financial audit.
Temp employees are usually employed and paid by a staffing agency that is in turn paid by the hiring company. You can also place your own ad for a temporary employee, but a staffing agency is more efficient and deals directly with hiring, payroll, and human resources issues.
It's important to make sure that you adhere to legal and tax requirements when hiring temporary workers. If you are working as a temporary employee, you may be able to deduct some of your employment expenses from your tax return.
Benefits of Temporary Employment
Companies save money by hiring temporary employees since they do not have to provide health benefits and paid time off to temps.
Disadvantages of Temporary Employment
Each temporary employee must be trained, which takes up your valuable time. They do not have the same loyalty to the company as full-time employees do.
Other Types of Employment
It's important to understand whether a position is contract or temporary, since these assignments are often presented interchangeably. Typically, this hinges on your status with the employer in question.
Temporary-to-permanent positions, also known as "right to hire," allow you to try out an employee on a temporary basis before deciding to offer him or her a full-time position. Until you hire the person on a permanent basis, he or she is paid by the staffing agency.
Direct-hire positions are typically permanent full-time jobs with benefits. These positions can also be hired through staffing agencies if you need assistance finding candidates. However, you choose a candidate and hire them directly rather than hiring an employee of the staffing agency.
Permanent positions include staff positions in which you work full-time and receive benefits. You will be paid through the employer's payroll rather than by a staffing agency.
Opting for a Temp or Contract Position
As a job candidate, you may be reluctant to accept a temporary or contract position. However, you may be overlooking a great job opportunity. Common myths about these types of positions include:
- You can't continue to look for a job while on a contract position. Actually, there's no need to put your permanent job search on hold. If you do find another opportunity, talk with your recruiter about providing appropriate notice.
- They don't look good on your resume. In fact, hiring managers prefer to see you keeping your skills up-to-date and working steadily even if you don't have a full-time position.
- They are beneath your skills. In fact, many excellent companies hire temporary workers for great opportunities. If you impress them, you are in a good position to earn a full-time role.
- It's better to collect unemployment than to take a temp job. While unemployment benefits provide a safety net, they don't last forever.
If you need help with hiring a temporary employee, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.