What is a Casual Employee?
The term casual employee is not a familiar one to many Americans. Instead we tend to see the terms "temporary worker" or "independent contractor" instead. Defining what this type of employee is can get somewhat confusing, since the term can differ from country to country.
In the US, the term casual employee is often used in universities. It refers to people, often students, who work less than 1,000 hours per 12-month calendar year, on an irregular, infrequent, or “as-needed” basis.” Because the worker doesn't work regularly, he or she does not usually have access to benefits like worker’s compensation, disability, company retirement plans, or health insurance.
According to IRS code, if an employee works more than 1,000 hours in a year, he or she must be reclassified. The employer must then contribute worker’s compensation and disability payments. Restrictions on participating in company health plans or retirement plans may still apply to the “regular” part time worker.
Alternately, when the term casual employee is used in place of the term “independent contractor” in the US, it refers to a person who can work as many hours as he or she likes for a company, or for multiple companies. The burden of obtaining health insurance, paying Social Security, and worker’s compensation wages are fully on the independent contractor. Further, the contractor has no expectation of continued work with a company. At any time, the company may choose to no longer employ the person and will not be responsible for providing unemployment benefits.
It can get somewhat confusing when a person who works for a temporary agency is considered a casual employee in the US. Generally, if a person consistently works for a temporary agency, he or she gains access to health insurance and any company retirement plans. It doesn’t matter how many places the person works, as long as the work is consistent and exceeds 1,000 hours in a calendar year. Technically, the temporary worker is not casual because he or she is not employed by the companies he is providing temporary work at, but instead by the temp agency.
In other countries, some people who work regular hours at jobs can choose to be a casual employee instead of a full-time, permanent worker. Again, the employee is usually responsible for paying whatever taxes the country requires, but he or she normally earns a higher pay rate. This is the case with many manufacturing employees in Australia, where many people choose this designation in order to have higher pay.
What is the citation for 1000 hours per year to be reclassified? IRS website, FLSA, DoL etc make no mention.
@DylanB: That sounds more like casual employment to me. Since you don't have set hours and have no guarantee that you will even get work during a certain time period, I would definitely call you a casual employee.
Having a job like that can be fun, as long as you have other things going on so that you can make money in the meantime. I would always have several projects going on at once, and I always enjoyed getting a call from my casual employer, because it always seemed to come at a time when I was having difficulty making money at other things.
The only downside to being a casual employee is having to keep up with your own taxes. I set aside 26 percent of each paycheck and put it in a savings account, and last year, that was enough. Your percentage depends on how much money you make and the current tax laws, though, so that is always changing.
@lighth0se33: Thank you. I was always wondering.Even though I don't have the company's benefits, I thought I too was saving them money.
Am I considered a part time or a casual worker if I am on call for whenever a regular worker is out sick or goes on vacation? I used to think of myself as a part time worker, but after reading this article, my job sounds more like that of a casual worker.
@lizfuls: Sadly, casual employees are often the first to go when full-time workers' hours are being cut. They are usually considered disposable.
However, there are cases where companies might prefer to keep the casual workers around and even convert some of the full-time workers to part-time. They don't have to offer them insurance, so they save money by having more casual workers. If they can work out the scheduling so that someone is always at the office, this might be ideal for them.
@nextcorrea: You can find these jobs posted online often. I do a little bit of freelance writing, so I sought out sites that listed writing jobs, and I wound up doing some work as an independent contractor.
I've been doing this work for over a year now, and though I know that it could end at any time, it is really nice to have it while it lasts. I don't mind not getting benefits, because there are other perks.
I can take off work whenever I need to, and I can set my own hours. I can work from home in my pajamas!
Where are casual worker jobs advertised? That sounds like just the job I need but I don't know where to find one.
There is a pizza place in my hometown where I have been working since I was 16. I am 20 and in college now, but whenever I come home for the summer or for breaks, they let me pick up shifts.
It is really nice to have a job like that that you can move in and out of as you need to. The owners are so nice, and the menu never changes, so it works well for all of us.
When I was in college, I worked at one of the school's food service facilities. I worked the grill, the salad station, the dish washing station and I helped bus the tables. But I always worked one of the later night shifts so there was usually hardly anyone there.
It was a good job and I made enough extra money to fund whatever fun times I wanted to have. Sometimes it was embarrassing to walk around in a wet white apron in front of all my friends and acquaintances, but you have to do what you have to do.
Can a casual employee keep their hours, when the full time staff is being cut to 32 hours
Is an individual considered self-employed for tax purposes who receives payment for a one-time service that he/she is not in the business of providing? Can he/she report the income on line 21 of Form 1040 and avoid paying the self-employment tax?
My current employer wants to pay me as a private contractor... Do i have to be incorporated to do so? She does not want to get herself or i, in any trouble can you please help??? thank you!
And i will be looking forward to hearing from you!!!
From the IRS (United States) website: Casual or seasonal employees are subject to the same tax withholding rules that apply to other employees. For additional information on your tax responsibility as an employer, refer to our section on businesses with employees. These rules are also explained in IRS Publication 15, Circular E, Employer's Tax Guide.
I lost my job as a regular employee after 19 years. Consulting firms contacted and place me with short contacts with 2 large IT firms. One was 1099 and one was W2. I kept my residence in OK while I worked in TX on a 6 month contract last year. This contact was W2 with a consulting firm who place me in the 6mo contact with a large IT firm. Does the fact that I was paid W2 screw me up as a contractor with the IRS and expense deductions?
Where did you obtain your information regarding the 1,000 hours worked and the employee being reclassified? I have looked all over the IRS website and can't find this information.
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