From eVisionMedia, Katherine Hartvickson offers her guidance on the pros and cons of hiring employees and independent contractors.
Or those that provide services such as bookkeeping, human resources, safety administration, computer support or project management on an as-needed basis.
- Typically, IC’s enjoy a higher rate of pay than employees since there are no additional costs.
- Most IC’s are experts in their field and can quickly get up-to-speed on your needs, so it’s more efficient to hire them if their expertise is not needed full-time.
- Depending on the language in your IC agreement, it’s easy to let an IC go once a project is finished or you no longer need or want their services.
- IC’s stay up on the latest technology, regulations and licensing requirements and bear any costs to do so.
- By creating a Scope of Work agreement, both you and the contractor agree on the working relationship details.
- You have less control over the work of an IC because although they work on due dates, they independently determine how best to get the work done.
- They tend to work remotely so face-time is limited and it’s a little harder to develop a relationship like you do when with employees you see every day.
- When an IC finishes an assignment, they might not be available the next time you need them. Or if it is a rush job, they might charge higher prices to move to the front of the line.
- If an IC is injured on the job, they can sue you for damages because they are not covered under your workers’ compensation insurance plan.
- Federal governing agencies watch small businesses very closely. It is to the government’s benefit when an employer collects taxes from employees and pays the company portion of the required taxes because those taxes support the government’s operating budget. Otherwise, IC’s often under-report their earnings and fail to pay both the employee and employer taxes.
- If they work exclusively for you full time, there’s a good chance they are an “employee” rather than an IC – and you are legally required to treat them accordingly.
- They are less likely to serve as a brand ambassador for you – it’s their brand they will promote – not yours.
Read the full story at The Pros and Cons of Hiring Employees Vs. Independent Contractors