Leverage an AI Data Labeling Contingent Workforce to Optimize AI Operations

The AI data labeling market is compounding, driven by the rising need for extensive, well-labeled datasets to train increasingly complex AI models. This growing demand for scalable and accurate labeling is leading many companies to rely on a contingent workforce to scale efficiently.

A contingent workforce allows companies to quickly adjust the size of their workforce based on project needs, while also tapping into a diverse talent pipeline with varied perspectives.

This global approach reduces operational costs and scales data annotation, giving enterprises a competitive advantage in this rapidly growing field. However, managing contractors across different countries presents regulatory and compliance risks.

We’ll outline how to hire, pay, and manage a global contingent workforce compliantly to optimize AI operations.

Strategic advantages of a contingent workforce for AI data labeling

A distributed, global data labeling workforce enables organizations to access the capacity and specialization required to support large-volume and continuously evolving datasets.

More importantly, this workforce model allows enterprises to align labeling output with fluctuating project demand—scaling resources up or down without compromising quality, timelines, or governance. When managed with the right controls, a distributed workforce becomes a critical component of enterprise AI operations rather than a tactical resourcing approach.

Leveraging a contingent workforce for AI data labeling delivers multiple advantages, such as:

• Scalable global capacity: A global contingent workforce allows enterprises to scale AI data labeling capacity quickly to meet fluctuating demand. Organizations can support large, evolving datasets without the fixed costs or delays associated with permanent hiring

• Always-on execution: Distributed teams enable continuous workflows that compress project timelines and accelerate model development, improving time to value for AI initiatives

• Localized expertise at scale: Regionally distributed contractors provide the linguistic and cultural expertise required for high-quality labeling, improving model accuracy in language- and context-sensitive use cases

• Cost and workforce adaptability: The contingent workforce model aligns labor spend with actual demand, improving cost efficiency and reducing long-term workforce risk

• Centralized governance and reduced overhead: Deel provides a centralized layer for contractor management, onboarding, payments, and compliance, reducing administrative complexity while improving financial visibility and control across global operations

Hiring a contingent workforce for AI data labeling

Hiring global contractors at scale requires a clear, structured approach. Here are important steps to implement:

1. Define role scope and operating requirements

Start by clearly defining the scope of work for each contractor role. Specify the type of data labeling required (such as image annotation, text classification, speech transcription, or multimodal labeling) as well as the expected output volumes and quality thresholds.

For enterprise programs, the operating requirements should include:

• Extensive experience with specific annotation tools or platforms

• Domain or linguistic expertise tied to the model use case

• Data sensitivity levels and access restrictions

• Service-level expectations, including turnaround times and QA processes

Clear role definitions reduce downstream quality issues and support consistent execution across large, distributed teams.

2. Source candidates through scalable, auditable channels

Targeted recruitment through professional networks and global job platforms can support volume hiring, while specialized data labeling providers offer access to pre-qualified contractors for large or time-sensitive initiatives.

When sourcing at scale, enterprises should prioritize:

• Geographic coverage aligned to language and cultural requirements

• Proven experience with enterprise AI workloads

• The ability to scale contractor volume up or down as project demand changes

Sourcing decisions should also consider supplier reliability and the ability to maintain consistent quality across regions.

3. Establish compliant, IP-secure contractor agreements

Contractor agreements must be standardized, jurisdiction-aware, and designed to protect enterprise interests. Agreements should clearly define:

• Scope of work and deliverables

• Data ownership and intellectual property assignment

• Confidentiality, data protection, and security obligations

• Payment terms and termination conditions

For global programs, contracts must also align with local labor laws to mitigate misclassification and co-employment risk. Using a centralized contractor management platform helps enforce consistency while supporting local compliance requirements.

4. Thoroughly screen and vet candidates

Vetting processes should scale with project criticality and data sensitivity. In addition to reviewing prior work or completing task-based assessments, you should apply consistent screening standards across regions.

This may include:

• Identity verification and background checks

• Language or domain proficiency validation

• Role-based access controls tied to data sensitivity

Deel offers background checks and identity verification in 160+ countries to help you find contractors that meet your standards.

5. Onboard contractors efficiently

Contractors should receive timely access to tools, documentation, and training while ensuring that contracts, tax documentation, and compliance requirements are completed before work begins.

Automating onboarding through a centralized platform enables:

• Faster time to productivity

• Standardized documentation and approvals

• Clear audit trails for compliance and finance teams

This approach allows enterprises to scale data labeling operations quickly without introducing administrative bottlenecks or compliance gaps.

See also: Hiring and Managing Contractors: A Global Client's Guide

How to pay a contingent workforce compliantly

Paying a large contingent workforce in AI data labeling requires flexible payment methods and bulk payment capabilities to achieve scalability. 

Multi-currency options, PayPal, and cryptocurrency ensure contractors are paid accurately, on time, and according to their preferences. Solutions like bulk payments allow companies to quickly pay hundreds of contractors at once, reducing administrative effort and keeping projects on track.

Payment schedules

In AI data labeling, payment schedules typically revolve around milestone-based or hourly payments.

• Milestone/project completion payments: Ideal for larger data labeling projects, payments are made after reaching certain milestones or upon project completion. This balances security between the contractor and the company

• Hourly payments: Contractors can be paid hourly for ongoing or long-term data labeling tasks. In these cases, it's important to define a clear payment schedule (weekly, bi-weekly, or monthly) so contractors know when to expect their payments

Bulk payments

Deel offers a bulk payment feature for contractors, which allows clients to pay their entire team in one click. This feature is designed to streamline the payment process for companies managing multiple contractors.

This bulk payment capability is one of the advantages Deel has over some contractor payment providers, as it simplifies the process of managing payments for multiple contractors simultaneously. It's part of Deel's integrated approach to contractor management, which includes features like automated invoicing and comprehensive contract management.

Payment methods

It’s important to offer multiple payment methods to accommodate the preferences and accessibility of contractors in different regions. Some of the best options include:

• Wise (formerly TransferWise): Offers direct transfers to local bank accounts with minimal fees and transparent exchange rates. It avoids the high costs associated with traditional bank transfers and ensures contractors receive more of their earnings. It’s best suited for contractors who need frequent, smaller payments. It’s an excellent choice for ongoing data labeling tasks where contractors bill hourly or weekly.

• Payoneer: Contractors can withdraw funds directly to their local bank accounts or through a prepaid Payoneer Mastercard. Payoneer is accessible in over 200 countries, making it ideal for contractors working in regions where traditional banking is less developed. It’s best for larger payments or contractors who need flexibility in how they access their funds. It’s especially useful for long-term projects where contractors may want multiple payout options.

• PayPal: Paypal is widely accepted, offering a fast and convenient way to send payments globally. However, it comes with higher transaction fees (up to 3.9% for international transfers) and currency conversion fees, which may reduce the contractor’s earnings. It’s best for quick, smaller payments or contractors in countries where PayPal is easily accessible. It’s an option favored for its simplicity but can be expensive for high-value projects.

• SWIFT transfers: They are reliable for sending large payments securely. However, they come with high fees and can take several days to complete. SWIFT is best for one-off, high-value transactions rather than recurring payments. It’s best for large-scale data labeling projects where payments are tied to major milestones or upon project completion. It’s ideal for contractors handling large volumes of work where security and guaranteed payment are prioritized.

• Digital wallets: They allow contractors to receive payments instantly and withdraw funds to local accounts or use them directly from their wallets. Platforms like Revolut have lower transaction fees and are popular in regions with less developed banking systems. This method works best for contractors in regions where traditional banking options may be limited or where real-time access to funds is critical. These wallets are ideal for smaller, frequent payments for ongoing tasks.

• Cryptocurrency: Platforms like Deel support payments in Bitcoin and Ethereum, providing contractors with a fast, decentralized way to receive funds compliantly through cryptocurrency. This method bypasses banks and currency conversion fees, though it comes with volatility. This works best for contractors comfortable with cryptocurrency, particularly in regions with unstable banking systems or high transfer fees.

See also: How to Pay International Contractors in 2025: A Complete Guide

Managing compliance risk across a global contingent workforce

Managing a global contingent workforce comes with legal and compliance challenges, particularly regarding worker classification, taxes, and local labor laws. 

Here are the most important steps to take to avoid non-compliance fees and penalties.

Classify workers correctly

Misclassifying contractors can lead to fines and penalties. To avoid this, implement a formal classification process by regularly assessing the degree of control over the contractor’s work. 

Use tools like Deel’s misclassification assessment to ensure your contractors are classified correctly according to local regulations. Conduct annual reviews to ensure all classifications are up-to-date as laws or project scopes change.

Automate local compliance updates

Staying compliant requires proactive monitoring of local labor laws, which vary widely across countries. One way to manage this is by subscribing to legal updates from reliable sources, using global compliance platforms like Deel’s Compliance Hub, or working with local legal advisors in each region. 

Automate notifications for regulatory changes and implement ongoing reviews to ensure contracts and operations align with new regulations. For instance, if tax withholding laws change in a contractor’s country, make the necessary adjustments to your payment processes immediately.

Establish a global tax compliance process

International tax laws are complex, so it's crucial to create a centralized system for managing taxes. This involves collecting the correct tax forms (e.g., in the US the W-8BEN for foreign contractors), issuing tax documents at the year’s end, and maintaining proper records. 

Use global payroll platforms or hire international tax advisors to manage this process and ensure you are following the tax laws in both your country and your contractor’s. Automating the collection of tax forms and reporting deadlines helps you avoid costly mistakes.

See also: 7 Challenges Facing Global Companies When Hiring Independent Contractors

Benefits of a contractor management platform

Managing a large number of contractors across multiple regions is complex, but the right contractor management platform helps you scale efficiently and stay in control. Here’s how it can your high-volume hiring and management needs:

• Flexibility and scalability: A powerful platform adapts to your growing data labeling needs, allowing you to quickly onboard and manage hundreds or even thousands of contractors without bottlenecks. Standardized workflows and real-time project updates keep your operations running smoothly, even as demands shift.

• Streamlined onboarding: A robust platform automates onboarding, letting contractors submit documents digitally. With features like automatic task assignment based on location or department, and detailed progress tracking, platforms like Deel make it easy to onboard large teams quickly. This automation helps ensure compliance and minimizes manual effort, which is crucial for efficiently scaling your workforce.

• Global payment processing: Easily manage payments to large, international teams using a platform that supports multi-currency transactions. Offer contractors flexible payment methods—like bank transfers, PayPal, or cryptocurrency—while maintaining clear payment schedules and minimizing fees.

• Automated compliance: Managing large-scale contractor workforces across multiple regions can be risky without proper compliance. A robust platform automatically handles adherence to local labor laws, worker classification, and tax regulations, protecting you from legal complications while freeing up your resources.

Scale your AI operations workforce with Deel

Deel simplifies large-scale hiring for AI data labeling by streamlining the recruitment and onboarding of international contractors. 

With automated workflows and task assignment, you can quickly scale up your workforce without bottlenecks. Deel also ensures seamless payroll management by supporting bulk payments, and multi-currency transactions, offering contractors flexible payment options like bank transfers, PayPal, or cryptocurrency.

Schedule a call with our experts today to learn more about how Deel can help you scale your AI operations and workforce.