The same happens in the Netherlands. However, that doesn't mean that it's legal. It's just that it's so convenient for both parties and IT contractors are so well paid that nobody challenges it.

I assume this is the same in most countries. IT contracting in it's current form is only viable because it's well paid and IT workers are rarely organised.

(And there's a major vested interest in keeping it this way, hence the rapid removal of this excellent article from the frontpage of HN yesterday: http://socialistworker.org/2015/06/24/class-capitalism-and-t... )