Employee or Independent Contractor?

Why You May Want to Treat Your Employees Like Independent Contractors 

laptop in a coffee shopFrom Inc., Jeff Hayden shares a guest post from Jared Burden who discusses some of the differences between being an independent contrator and an employee recommends that employers trust employees the way that employers trust independent contractors.  Jared writes:

I know contractors who are one or two technicalities away from being an employee, performing their work for just one client, while others juggle numerous dissimilar engagements with timeframes long and short. Some work in teams brought together by platforms like Google Hangout and some go through a week without talking with anyone but their client and their significant others.

The labels given to independent contractors are legion, including freelancer, of course, but also Citizen of the Free Agent Nation, participant in the On-Demand Economy, “solopreneur”….

Some contractors say that they enjoy the freedom of doing things their own way and on their own time–that the only performance review they want is the one given to them directly by their client. Daniel Pink famously summarized the motivations of free agents as mastery, purpose, and autonomy. The motivation to get good at what you do and to find meaning in it–with the room to figure out how to get there.

No one can explain where self-motivation comes from. Either it’s there or it isn’t. It has always been thus. And some of the folks sitting right near me right now have it.

One software developer doing work for Microsoft listed the benefits of being an independent contractor as flexible hours, safety from office politics, fewer tedious meetings, the opportunity to do overtime (she was paid hourly), and a variety of experience gained as she went from client to client over time. She also noted that the “permanent” employees doing the same work she was doing lived day-to-day with the knowledge that “permanent” doesn’t really mean permanent anymore.

It’s not just the self-motivators who doff their fedoras to independent contracting. Many companies think it works for them, too. It offers flexibility, the ability to be nimble and plug people into specific needs that arise with less friction and inefficiencies.

Many companies also think it’s a good thing to have a smaller number of people eligible for overtime and reimbursement of job expenses, and to have fewer employees to trigger state and federal income tax withholding obligations. The employer-employment relationship is rife with legal risks, such as accusations of sexual harassment and racial discrimination, as well as a higher risk of being held responsible for what the person may negligently do to others in the course of the day. And some employers are happy to simplify their corporate life by having contractors do as much of the work as possible.

The lines can get blurred. Some companies just call a worker an independent contractor, have the person sign a boilerplate agreement, and then spike the football, thinking the matter is settled.

And then they tell the person how to do their job.

The risks of doing that, in terms of what the IRS and other agencies can do to an employer that crosses the fuzzy line, are many.

Read the full story at Why You May Want to Treat Your Employees Like Independent Contractors

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