Should You Hire Contractors or Employees?

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Should You Hire Contractors or Employees?With the rise of the gig economy, a certain type of occupation surged: the contractor. While contractors, or self-employed workers, are seen to have more freedom, they aren’t actually covered under the same laws and regulations as employees.

Contractual personnel can help you save money, but it’s important not to misclassify workers to cut down on costs alone. If budget is the only issue, you’ll still have options to help in times of low cash flow, like revolving credit that allows you to use only the amount you need.

Before we can suggest general tips and guidelines, the IRS detailed certain factors to consider:

  • Whether there is an intention to continue a working relationship, if there is a written contract and if there are benefits for the worker, like a retirement or insurance plan.
  • Whether a company has the right to control the work and manner in which the work is completed.
  • Whether aspects of a worker’s job are controlled by the payer, including whether or not the worker provides their own supplies and how they’re paid.

Should You Hire Contractors or Full-Time Staff Infographic

References

1Weltman, B. (2019). How Much Does an Employee Cost You?

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Bonnie P

Bonnie is a Chicago transplant who's committed to seeing the world on a dime. As an avid news junkie with a fascination with finance, she loves to help others do more with less.