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What's the difference between temping and contracting?

freelancesupermarket.com newsroom

RSS 03 September 2009
When considering the many available working options outside of full-time employment, it can be confusing to understand what they all mean.

The blanket term 'agency worker' could be applied to several things, for example; there are agencies that place people in short-term assignments, such as covering a maternity leave, and then there are agencies that handle temping or contracting.

It's not immediately obvious how temping and contracting differ. Both the temp and the contractor are not full-time employees of the company; they may be working through an agency; and some agencies place both types of worker.

The Professional Contractors Group (PCG) defines 'temping' as accepting assignments with the understanding that you will not become a permanent employee. You may be paid by an agency, and your work is not under your control; you have little freedom and your activities are directed by your supervisor, much like any other permanent employee.

Temping is a very flexible form of working - you may work for several companies over a long period of time but it's generally not a long-term career path (as the name suggests). Temping does have the advantage, under the Employment Rights Act of 1996, that if you work for one agency on a regular basis you may be able to claim benefits.. such as holiday pay and sick pay.

Contracting is an entirely different sort of arrangement. A contractor will generally work through their own limited company. As John Kell of the PCG says, "A contractor controls and runs their own business." This key element distinguishes contracting from temping, by identifying the major difference: control.

When contracting, you will accept a series of assignments from multiple clients - usually through an agency, but not necessarily. But as you are controlling and running your own business, you will determine how and where the work is done. You may also hire a substitute to do the work for you.

A further important distinction comes from the IR35 legislation and the set of rules that establish whether a contractor is actually a 'disguised employee'. The IR35 rules revolve around the qualities that your contracting work must have for you to be truly self employed, and to demonstrate that you are in fact controlling and running your own business.

The real distinction between temping and contracting relates to the time you expect to spend working on your own. Contracting is more of a longer term arrangement - think of a professional individual, running their own limited company with full control over the direction of their 'business'. Temping is more appropriate for transitional periods, where you expect to seek a permanent position in the near future.

As with most things in this industry, it's often difficult to exactly determine your status, particularly for tax purposes. What is for certain is that the terms 'temping' and 'contracting' will be used, confused, and misused for many years to come.

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