If you are a business owner, you will likely consider hiring an independent contractor to assist with one, or multiple projects. Independent contractors can be beneficial is a variety of situations and should not be overlooked as assets to your business. It is important for management to understand how these workers are classified and the legal implications that may result from working with them.
Independent contractors are those that provide services to an individual or business but that retain control over how those services are rendered. In an employer-employee situation, the employer has control over what the employee does and how he does it. When it comes to independent contractors, employers have much less control. This level of control is one of the determining factors when it comes to classifying workers as employees or independent contractors. Control comes in varying degrees and might refer to many different aspects of the employment; this may include scheduling, the methods and techniques that a worker uses, training, where the work is done and the frequency of the work. There is no one test or bright line to determine if someone is an employee or an independent contractor and all factors have to be taken into consideration in each case. Sometimes, the details of employment are agreed to in a contract. If you’re considering hiring an independent contractor, you should enter into a formal contract with them up front in order to avoid confusion in the event of a conflict.
There are some benefits to working with independent contractors. Generally, employers are not liable for the negligent conduct of an independent contractor. This rule varies from state to state and is subject to many different exceptions. Also, these workers are usually exempt from many of the employment laws that apply to regular employees, such as wage and overtime restrictions. Business owners also have different tax liability when it comes to these workers, in that they are not responsible for deducting payroll taxes from their wages.
This is not to say that businesses should use these workers for every task. In many situations, employees are preferable to independent contractors. If you are interested in hiring an independent contractor or are in need of a contract relating to the use of this type of worker, you should contact a qualified attorney today.