ContractsCounsel Logo

Understanding A Contract To Hire

Updated: March 28, 2023
Clients Rate Lawyers on our Platform 4.9/5 Stars
based on 9,865 reviews
No Upfront Payment Required, Pay Only If You Hire.
Home Blog Understanding A Contract To Hire

Jump to Section

What Does Contract to Hire Mean?

Contract to hire means a job that is offered as a short-term role but has the opportunity to turn into a permanent, full-time job when the contract ends. Also called "temp to hire," contract-to-hire positions typically last from around three months up to one year, though some contract-to-hire jobs may last for closer to three years.

Today, contract-to-hire positions are becoming more and more prevalent. Common industries that use contract-to-hire workers include:

  • Accounting
  • Administrative support
  • Graphic design
  • Information technology
  • Marketing
  • Project management
  • Sales
  • Seasonal retail

What Is a Contract-to-Hire Position?

A contract-to-hire position is a job in which a candidate is hired temporarily at first. However, the intention is that the worker will become a permanent employee if they perform well during their temporary status.

This is a unique type of job on the spectrum of hiring possibilities. Contract-to-hire jobs are neither permanent, regular roles nor freelance gigs. They are also not independent contractor positions. Instead, contract-to-hire jobs are W-2 positions, and the employer deducts the necessary taxes from a contract-to-hire employee's paycheck and submits those taxes to the government on their behalf. Contract-to-hire employees often have the same standing as full-time or part-time employees in a company.

Get Free Bids to Compare

Leverage our network of lawyers, request free bids, and find the right lawyer for the job.

Get Bids Now

Is Contract to Hire a Good Idea?

Contract-to-hire jobs sometimes have a negative connotation. After all, they don't come with benefits or guarantees for the workers, and the short-term contracts seem like they can't do much to build someone's career. However, contract-to-hire jobs can actually help you during your job search, letting you test out companies and roles without making a long-term commitment. The flexibility that contract-to-hire jobs bring offers advantages for employers as well as employees.

Benefits for Employers

A business may hire contract-to-hire employees when they don't have the capability to hire full-time employees but need help to grow a small business that's just starting out or regrow a business after a period of economic hardship. Businesses may also use contract-to-hire positions to ensure they have the right person in the right job.

Benefits of contract-to-hire jobs for the employer include:

  • Businesses can evaluate a candidate's skills: A contract-to-hire position is somewhat like an extended job interview, except the employee has the perk of getting paid during this period of time. Employers want to be sure that an employee can deliver on what they claim during an interview. A bad hiring decision can be an expensive mistake for a company, and a contract-for-hire position lets the business make sure that the employee really does know how to do the job well before they make a long-term commitment.
  • Businesses can assess a candidate's fit: These temporary jobs are not just about making sure a candidate knows how to do a job well. A contract-to-hire position also lets employers determine if the candidate is a good fit for the company culture.
  • Contract-to-hire positions allow for budget flexibility: Budget often plays a key role in hiring contract-to-hire positions. Before bringing on an employee for full-time work and paying them a salary as well as benefits, employers want to make sure that they have the allocated funds for a given project secured. By hiring employees on a contract-to-hire basis, businesses get the time they need to get a budget in place a couple of weeks or months in the future while still making sure that they can maintain productivity in the meantime.

Benefits for Employees

Job seekers may be hesitant to look for contract-to-hire jobs because they think that the setup only benefits the business hiring for the position. However, contract-to-hire positions also offer various benefits for the worker accepting the job.

Advantages for employees hired for a contract-to-hire position include:

  • Employees can assess a company's fit: Most people don't want to get themselves stuck in a culture they don't fit into or a job they don't enjoy. Just like a contract-to-hire position allows employers to make sure that the person they want to hire fits in well, employees can use the role's short-term nature to do the same. You can accept a contract-to-hire position to take the role and the company for a "test drive" without worrying about making a longer commitment to a job you don't know if you'll actually want or like.
  • Contract-to-hire positions can fill in employment gaps: If you have been out of work for a long time, a contract-to-hire position can help fill in that gap. Even if the role doesn't end with a permanent job offer, it makes it easier to explain unemployment when going back on the job market. Workers can also show that they stayed professionally active and kept up their essential skills by taking on short-term jobs. Here is an article with further information about employment gaps.
  • Contract-to-hire positions can help you grow a professional network: Every person you work with during a contract's duration adds a connection, so these jobs can help you expand your professional network. Although those connections might not immediately lead to a permanent role in the business, those people could have other connections that can help you get a permanent job in another place. For example, if a worker makes a good impression on an employer that can't offer a full-time position, the employer can still provide references, recommendations, or referrals. Here is some further reading about job references.

Disadvantages for Employees

Contract to hire means less stability for an employee, and these jobs do have some drawbacks that may make a potential employee hesitate to take this kind of position. Disadvantages of contract-to-hire jobs include:

  • There's no guarantee for future employment: An employer can decide not to extend an offer for permanent employment at the end of the contract for any reason, such as financial constraints. Employees then have to start their job search again.
  • A contract-for-hire job offers less financial security: If the contract expires and the employer doesn't offer a permanent position, the contractor does not get any severance.
  • Benefits and health insurance are not guaranteed: Contract-to-hire jobs obtained via a recruiting agency often offer health insurance through the agency itself. However, contract-to-hire jobs contracted directly with a business may or may not offer health insurance during the contract.

Components of a Contract-to-Hire Agreement

A contract-to-hire agreement should have a few key components to protect both the employer and employee. While a contract-to-hire position is typically a W-2 position, these employees may not be eligible for the same kind of benefits as normal full-time workers unless the contract specifically outlines these benefits.

Most contract-to-hire documents will include:

  • Start date
  • End date
  • Job description
  • Explanation of what could happen when the contract ends, for example:
    • Hire employee for a full-time position
    • Let the employee go
    • Sign a new contract-to-hire agreement
  • Explanation of what could happen if the employee wants to leave a contract early, for example:
    • Any penalties for leaving early
    • Required notice
  • Details about time off, including:
    • Paid time off
    • Sick leave
    • What happens if an employee gets sick but isn't eligible for time off
  • Any other benefits

It's important to work with an experienced contract lawyer when creating or signing a contract-to-hire document to ensure that you understand this kind of job's details and expectations.

How ContractsCounsel Works
Hiring a lawyer on ContractsCounsel is easy, transparent and affordable.
1. Post a Free Project
Complete our 4-step process to provide info on what you need done.
2. Get Bids to Review
Receive flat-fee bids from lawyers in our marketplace to compare.
3. Start Your Project
Securely pay to start working with the lawyer you select.

Meet some of our Lawyers

Travis D. on ContractsCounsel
View Travis
5.0 (1)
Member Since:
August 8, 2022

Travis D.

Free Consultation
Norman, OK
4 Yrs Experience
Licensed in OK
University of Oklahoma

Travis counsels individuals and businesses on a broad range of complex topics. His practice centers on producing efficient, client-driven results. He concentrates his practice on real estate, construction, and general business matters with an emphasis on assisting clients both before and after problems occur by drafting contracts designed to best position clients to avoid disputes and litigating matters to a final resolution if problems emerge. Born and raised in Oklahoma, Travis is a triple graduate of the University of Oklahoma, having obtained his Bachelor of Arts, Master of Business Administration, and Juris Doctor degrees from OU. Prior to practicing law, Travis managed the finances and business operations of a successful construction supply company for several years. This insight into sophisticated business dealings, contractual issues, and strategic planning makes him uniquely qualified to handle a wide range of legal matters. Travis lives in Norman with his wife, Haley, dogs, Walter and Poppy, and cat, Ernest. Outside of the office, Travis enjoys playing golf and reading.

Justin C. on ContractsCounsel
View Justin
5.0 (1)
Member Since:
August 12, 2022

Justin C.

Free Consultation
Hammond Indiana
7 Yrs Experience
Licensed in IN
Valparaiso University Law School

Justin Camper is a small business and trademark attorney, entrepreneur, public speaker, and writer. Justin has been practicing law close to 5 years and has done various areas of law from criminal work as a Prosecutor, to business and civil litigation at private law firms.

George L. on ContractsCounsel
View George
5.0 (6)
Member Since:
August 16, 2022

George L.

Free Consultation
Rock Hill, SC
5 Yrs Experience
Licensed in GA, SC
University of Georgia School of Law

I am a corporate attorney with offices in Rock Hill, SC, and Lavonia, GA. My practice is focused on contracts, tax, and asset protection planning. I act as a fractional outside general counsel to over 20 businesses in 6 countries. When not practicing law, I can usually be found training my bird dogs.

Max N. on ContractsCounsel
View Max
5.0 (6)
Member Since:
August 17, 2022

Max N.

Free Consultation
5 Yrs Experience
Licensed in OK
Oklahoma City University School of Law

Oklahoma attorney focused on real estate transactions, quiet title lawsuits, estate planning, probates, business formations, and all contract matters.

Mark F. on ContractsCounsel
View Mark
4.9 (3)
Member Since:
September 2, 2022

Mark F.

Free Consultation
Silicon Valley, CA
43 Yrs Experience
Licensed in CA
University of California Hastings College of Law

International-savvy technology lawyer with 35years+ in Silicon Valley, Tokyo, Research Triangle, Silicon Forest. Outside & inside general counsel, legal infrastructure development, product exports, and domestic & international contracts for clients across North America, Europe, and Asia. Work with Founders to establish startup and continuous revenue, sourcing and partnering with investors to attract funding, define success strategy and direct high-performing teams, advising stakeholders and Boards of Directors to steer company growth.

Bolaji O. on ContractsCounsel
View Bolaji
Member Since:
August 9, 2022

Bolaji O.

Princial Attorney
Free Consultation
New York
5 Yrs Experience
Licensed in NY
Texas Souther University - Thurgood Marshall School of Law

Bolaji O. Okunnu is an entertainment lawyer and founder of the Okunnu Law Group, PLLC based in New York, New York. His practice includes work in the area of copyright, trademark, contract, intellectual property and business law. As an entertainment attorney, Bolaji represents a diverse roster of celebrities, record labels, music publishers, artists, bands, entrepreneurs, authors, songwriters, artist managers, record producers and entertainment executives concerning their intellectual property, business affairs and creative assets. He is an expert at solving complex and sophisticated legal and business issues relating to contracts, copyrights and trademarks. With his background in both the law and the music business, he brings a broad perspective to problem-solving and business plan strategies. He also has an extraordinary ability to speak to the hearts of creatives while helping them discover their voice and clarify their creative dreams and assignments.

Matt M. on ContractsCounsel
View Matt
Member Since:
August 16, 2022

Matt M.

Free Consultation
Orem, Utah
17 Yrs Experience
Licensed in UT
Washington & Lee University

I love to learn, and I love solving problems. That's why I became a lawyer, and learned to solve legal problems for individuals and businesses and help them fix things when there's a snag. Touch base if you think I could have something to offer for you or your company. Experienced, results-oriented legal professional whose background and education have established him as a valuable resource in areas of corporate law, franchising, litigation, compliance, mortgages and banking, and more. Practice Areas Include: Corporate law, Franchising, Litigation, real estate, corporate law, civil disputes, insurance representation, corporate counseling, dispute resolution, risk management, regulatory counsel, compliance. Experience involves sophisticated as well as routine corporate structuring and transactions, simple and complex litigation, and written and oral advocacy such as depositions, mediated settlement conferences, trials, appeals, written pleadings and discovery, and case strategy and analysis. Experience managing and litigating disputes between parties and negotiating settlements across the spectrum of civil litigation, including probative discovery, successful motions practice, legal research and writing, appellate practice, and legal consultation to individuals and business entities. Further experience includes digesting and monitoring updates to the legal landscape to advise clients or departments and successfully adapt policies and procedures to assure compliance with applicable laws and regulations as well as to manage risk effectively. For those needing a skilled commercial or corporate lawyer, or for individuals whose rights need persuasive advocacy, I am a valuable resource. Representative work also has involved success on the appellate level, as in Baker Construction Company, Inc. v. City of Burlington and Hawthorne, LLC, North Carolina COA09-13.

Madeline P. on ContractsCounsel
View Madeline
Member Since:
August 14, 2022

Madeline P.

Free Consultation
Frisco, Texas
8 Yrs Experience
Licensed in TX
Southern Methodist Uninversity - Dedman School of Law

I am the CEO and attorney at my law firm that I started in June 2020 (as other businesses were shuttering due to Covid-19). I am currently seeking contract work to supplement my case load as I recently finalized numerous family law cases within a short timeframe.

John C. on ContractsCounsel
View John
Member Since:
August 16, 2022

John C.

Free Consultation
Leawood, Kansas
43 Yrs Experience
Licensed in KS, MO
U.M.K.C Law School

Licensed to practice law in the states of Missouri and Kansas. Have been licensed to practice law for 44 years. Have been AV rated by Martindale Hubbel for almost 30 years.

Michael S. on ContractsCounsel
View Michael
Member Since:
September 20, 2022

Michael S.

Free Consultation
Philadelphia, PA
34 Yrs Experience
Licensed in PA
Temple University School of Law

Real estate and corporate attorney with over 30 years of experience in large and small firms and in house.

David A. on ContractsCounsel
View David
Member Since:
August 30, 2022

David A.

Free Consultation
Chicago, Illinois
19 Yrs Experience
Licensed in IL
Chicago Kent College of Law

David Alexander advises clients on complex real estate transactions, including the acquisition, disposition, construction, financing and leasing of shopping centers, office buildings and industrial buildings throughout the U.S. An experienced real estate attorney, David reviews, drafts and negotiates all manner of retail, office and industrial real estate agreements, including purchase and sale agreements, construction contracts, leases and financing documentation.

Find the best lawyer for your project

Browse Lawyers Now

Need help with a legal contract?

Post Your Project

Get Free Bids to Compare

Hire Your Lawyer

See All Employment Lawyers
See All Understanding A Contract To Hire Lawyers
Learn About Contracts
other helpful articles

Quick, user friendly and one of the better ways I've come across to get ahold of lawyers willing to take new clients.

View Trustpilot Review

Contracts Counsel was incredibly helpful and easy to use. I submitted a project for a lawyer's help within a day I had received over 6 proposals from qualified lawyers. I submitted a bid that works best for my business and we went forward with the project.

View Trustpilot Review

I never knew how difficult it was to obtain representation or a lawyer, and ContractsCounsel was EXACTLY the type of service I was hoping for when I was in a pinch. Working with their service was efficient, effective and made me feel in control. Thank you so much and should I ever need attorney services down the road, I'll certainly be a repeat customer.

View Trustpilot Review

I got 5 bids within 24h of posting my project. I choose the person who provided the most detailed and relevant intro letter, highlighting their experience relevant to my project. I am very satisfied with the outcome and quality of the two agreements that were produced, they actually far exceed my expectations.

View Trustpilot Review

How It Works

Post Your Project

Get Free Bids to Compare

Hire Your Lawyer

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call

Find lawyers and attorneys by city