Are Independent Contractors Worth the Risk?
When considering how best to staff particular jobs, business owners may wonder whether it might be preferable to hire independent contractors rather than permanent employees. In truth, there are both advantages and disadvantages to this option. Here are some things to keep in mind when you are contemplating using independent contractors for some of your personnel needs.
Hiring independent contractors saves you the time-consuming process of finding and training employees. Independent contractors already have the specialized training and expertise you require. You take on independent contractors for specific tasks, and when their work is complete, they leave. You are then free to hire other independent contractors with the specific skills needed for future jobs.
Reduction of Costs
Although in the short term, independent contractors may require a higher hourly wage than entrance-level employees, they are ready to get right to work, which eliminates the costs of training. Additionally, you don’t have to pay a share of Medicare and Social Security taxes, unemployment compensation insurance, workers compensation insurance, or provide benefits for independent contractors.
Independent Contractors Don’t Have the Same Rights as Employees
Federal and state laws grant employees numerous rights that are not available to independent contractors. For instance, independent contractors cannot form unions. They do not the right to sick leave or overtime compensation. Discrimination laws are not as strict for independent contractors, and they cannot sue for wrongful termination in the same way that employees can.
The advantages of hiring independent contractors are partially offset by some disadvantages. For example, you don’t have the same degree of control over independent contractors as you do over your own workers. It can be disruptive to have temporary personnel coming and going into your workplace. Your right to terminate employment is limited by the contract you have agreed upon. Additionally, independent contractors, unlike employees, may be able to claim copyright of intellectual property that they create for you.
For more advice on the benefits and drawbacks of hiring independent contractors, get in touch with Advanced Commercial Capital LLC.