What is

Contract Employee


Self-employed individuals performing specific projects for a company based on agreed-upon contract terms. Similar terms are independent contractors/freelancers.

Increasingly, companies are choosing to diversify their workforce with various types of contracts. One of them is a contract employee. Some companies may refer to their independent contractors or freelancers as a contract employees. Others may engage employees by offering them fix-term contracts. 

What Is a Contract Employee?

There can be two ways to define a contract employee. Sometimes, companies use the term interchangeably with an independent contractor, freelancer, or contingent worker. 

However you choose to call these professionals, they usually offer highly specialized skills and work for companies on specific projects. They do not access the same benefits as the employer’s full-time staff. They also manage their own schedules and have a lot of flexibility. 

Sometimes, companies also call contract employees those workers who do not hold an indefinite contract.  Instead, they work on a fixed-term contract. They may or may not access the same benefits as full-time employees. They may also follow the same terms of employment as the rest of the staff. 

Classification and Legal Implications 

Irrespective of the type of contract, it’s crucial for employers to correctly classify all of their workers. The conditions for this will vary from country to country. Familiarize yourself with employee misclassification rules to avoid legal penalties wherever you operate. 

Stay Compliant with Borderless 

At Borderless, we’ve made compliance our business. Learn how we can help you onboard both employees and contractors in 170+ countries around the world. Book a demo now