TEMP VS SOW

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Why Contingent Workforce Classifications Are Essential?

People often mention SOW and Temp work together without knowing the difference between the two. What is Temp service? What is SOW service? 

In this article, you’ll learn about these two separately and their differences. Also, why contingent workforce classification is essential?

Why do we need to classify these two? 

So, let’s get into the details of them!

UNDERSTANDING GIG ECONOMY

As the world changes. people have started using contingent forces more than before. It has become really important to discuss the gig economy independent contractors. and the Temp workers.

The gig economy of the US is expanding 3x faster than the overall US market force. This rate is enough to analyze how the job market is changing.

On the other hand, firms have a proper procedure to hire individuals. Potential employees have to go through screening and interview processes. 

WHAT IS TEMP WORKER?

A temp or a temporary worker is the one who has fixed hourly rates for his services. He typically works on a fixed contract. Their time and work are tracked through monthly or weekly timesheet submissions. 

They are usually hired when a company has more workload than its workers can handle. They hire temp workers for help.

They are contract hires so they are subjected to W-2 tax. And are paid as the work progresses.

WHO IS AN INDEPENDENT CONTRACTOR?

Independent contractors are also known as self-employed. They specialize in specific skills and offer on their rates. They are hired based on the projects.

They are not subjected to the payment terms and W-2 as the temp workers. Independent contractors are hired for as long as the project ends.

This type of hiring is done through SOW because SOW covers the deliverables, the deadline, and what needs to be done in detail.

Read more about what is contingent staffing service

WHY IS IT IMPORTANT TO DIFFERENTIATE THE TEMP WORKER FROM AN INDEPENDENT CONTRACTOR

It is important that you can differentiate between the temp worker and the independent contractor because they differ in legal terms, including tax, benefits, and other employment laws.

If you do not know the difference, you will spend more on SOW and confuse other implications. 

Let’s discuss a few factors that differentiate the temp worker from the Independent contractor (IC). 

Employment Laws

Employment laws differ for independent workers and temp workers. Temporary workers are subjected to employment laws, including minimum wage criteria, overtime management, and other company benefits. On the other hand, independent contractors do not possess any such right.

Tax Laws

Similar to employment laws, there are tax laws applied to temp workers, while independent contractors do not go through such a process.

Benefits And Eligibility

Temporary workers are eligible for benefits offered by the company including health insurance, paid time off, depending on their employments contract. While the independent contractors are not eligible for that.

Liability

Employers have different liabilities in case of temporary workers and independent contractors. Temp workers are held accountable and work on behalf of the company. While independent contractors are responsible for their actions alone.

WRAP UP!

If you use SOW and Temp worker terms often, this article will be helpful for you. It covers what Statement of work is. What is Independent contractor. How do they differ in things including employment laws, benefits, tax laws, and liabilities. 

Read through the article and know the importance of knowing the difference between the two. 

Also, if you need SOW service in USA, there is no better place than MightyWarners. 

If you’ve more questions related to SOW service, refer to the frequently asked questions below.

FREQUENTLY ASKED QUESTIONS

What is Statement of Work or SOW service?

A statement of work is a document enforced by law with all the activities and details related to the project. It is detailed and has all the terms and conditions that both parties have agreed on.

next_what is sow service

Which SOW service in the USA is the best?

MightyWarners is the best SOW service in USA.

What is the meaning of a temp worker?

Temporary workers are those who work on fixed hourly rate, and contract basis with companies.

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