Freelancing

Freelancing is a form of temporary employment in which workers are hired for a defined period or the duration of a project. Freelancing further represents one form of contracting out, or outsourcing, through which a firm seeks vendors for specific services from outside its internal labor market. Freelancers (called freelances in the United Kingdom) are hired individually, either directly or through staffing agencies, and might also be called contractors, consultants, or, in parts of Europe, portfolio workers.

Rather than employers, freelancers have clients, which are typically employing organizations, although freelancers may also contract with individuals who seek their services. Over time, most freelancers work for a number of clients, either sequentially or simultaneously. They are thus mobile, independent workers, selling specific services in external labor markets outside standard, organization-based employment. Freelance employment encompasses a number of census categories and legal definitions. Freelancers who find work independently are often considered independent contractors engaged in a form of self-employment. Those who incorporate become employees of their small businesses. Freelancers may also be classified as employees of staffing agencies (or temporary placement agencies), [Page 305]which broker some freelance agreements and act as intermediaries in the labor market.

Since the 1980s, tax regulations in the United States have caused employers of freelancers in certain industries to engage the services of staffing agencies, which at a minimum withhold payroll taxes. Agencies then serve as employers of record for the freelancers on their payrolls, even when firms merely “payroll” freelancers through an agency after the freelancer and client have negotiated an agreement. Because some freelancers work for more than one client at a time, an individual might be employed simultaneously in more than one category. Some categories also include other workers, thereby confounding any definitive count of the freelance workforce. Freelancers are, however, considered part of the contingent workforce, when defined broadly enough to include all workers employed in nonstandard arrangements. Freelancers who average fewer working hours than a standard, full-time job might also be defined as part-time workers. Some freelancers working limited hours, however, may instead be “moonlighters,” supplementing standard jobs with additional sources of income.