The First Hire: Employee or Freelancer?

meeting at startupFrom Tweak Your Biz — Miles Young discusses the challenge of small business owners when it comes time to hire help — when it becomes necessary to delegate some tasks to enable the business owner to have enough time and be able to focus on growing the business.  Miles writes:

Do You Really Have a Choice?

If you are wondering if you should hire a freelancer or an employee, consider the overall job. The IRS has firm rules about what makes an employee and what makes a contractor. A good question to ask is: can tasks be performed by an independent contractor, or is the position structured in such a way that it must be filled by an employee? The decision you make is not arbitrary. If you misclassify the person you hire, your company could be fined.

Before you make your decision, review the contractor checklist from the IRS. This is not only an excellent guideline to help you decide which route to take, but it can also work as a tool to help you develop the position. For small businesses, a freelancer can be an invaluable asset to the growth of your company. In fact, a small team of freelancers can move your company forward quickly. Individually, they can focus on specific areas of the company allowing you to manage their projects rather than spend your precious time on administrative tasks. You can also hire freelancers to help with the data entry tasks to help free up more of your valuable time.

After reviewing the contractor checklist, small business owners can create customized positions that fit the contractor guidelines, thus allowing business owners the luxury of developing a team of micro-experts that truly are independent contractors. In so doing, businesses save on employee related expenses. Still, sometimes an employee is a better fit….”

Miles also provides the benefits of hiring an employee and benefits for hiring a freelancer.

Read the full story at The First Hire: Employee or Freelancer?

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