This is the reason. If they contract with a freelancer directly, and that freelancer has no other gigs, then the freelancer will be considered as another emplo

This is the reason. If they contract with a freelancer directly, and that freelancer has no other gigs, then the freelancer will be considered as another employee for tax, benefits and liability purposes. If they contract a freelancer from a consulting company, the consulting company takes the employment burden. You can get around this by creating your own company, but there are lots of complications for it. I'm not sure if they still exist (been a while since I did this) but you used to be able to join an "umbrella company"[0] which was set up and managed by an accountancy firm and employed a small number of contractors/freelancers, which worked well. [1] https://en.wikipedia.org/wiki/Umbrella_company https://en.wikipedia.org/wiki/Umbrella_company