The Value of An Independent Contractors In Contrast To An Employee
Independent contractors are people such as doctors, lawyers, veterinarians, and auctioneers. In other words, they are involved in trades or professions in which they provide services independently. The employment of these independent contractors gets based on the respective field of work.
Although you might be wondering what they do, how they work, the merits of hiring them, and more, continue to read on!
In This Article, We Will Uncover,
- What is an independent contractor?
- How does an independent contractor work?
- What are the pros of hiring an independent contractor?
- Independent contractors’ VS employees.
- What is the final verdict?
So, first things first,
Who Is An Independent Contractor?
An independent contractor is an individual who is hired to provide services for a business. Moreover, an independent contractor has complete control over the work that gets done. Above all, the employer usually does not have any control over the manner it gets done. Consequently, they have to accept the expected results.
Independent contractors are professionals in the business working free from the confines of any management or organization. There are significant differences between independent contractors and formal employees. Similarly, each kind of worker has its respective pros and cons.
How Do Independent Contractors Work?
The independent contractor is a private business corporation that does not get considered as an employee. An independent contractor works in an array of roles. These roles include but not limited to consultants, agents, or managers. Simultaneously, they also work in the business-oriented and creative fields like art, technical, IT, and several others.
The employees officially hired by the firms and establishments do not have to sign any contract unless they are some well-paid executives. However, an independent contractor gets signed with an official agreement. It is always safe to get an official agreement signed for each business/establishment they work for. This remains proof of when the working period gets finished and the declared terms and conditions. Furthermore, an official contract serves as evidence in the case of any dispute or disagreement.
Benefits Of Hiring An Independent Contractor:
There are numerous benefits of hiring independent contractors (ICs), but it comes with demerits too. Before you can decide on an option that is well-suited to your needs and requirements, it is essential to consider the advantages and disadvantages.
Having said that, there are various advantages when it comes to hiring independent contractors . We have listed some of them for you.
You Will Save A Significant Amount Of Money
Hiring independent contractors saves a considerable amount of money. Although they earn more amount per hour, it still ends up costing less than the hired employees. Additionally, when you hire an official employee, the employers have to offer benefits like designated office space and equipment, insurance, sick leaves, and more. Therefore, it usually ends up costing more than the independent contractors do.
Moreover, they will also have to make additional payments and contributions that include paying their social security and healthcare expenses. This amounts to a total of 7.65% of the employee’s reimbursements and stating their insurances such as unemployment/workers’ compensations as well.
Collectively, these expenses can hike up to 20 or 30% more.
You Have The Freedom Of Employment
Working with independent contractors offers employers greater staffing flexibility. They have the option to hire and terminate their workers based on the circumstances and the quality of work. Additionally, it can be beneficial for employers with irregular workloads. They can hire an independent contractor for a specific project and won’t have to face the worries of increased expenses and potential legal issues.
Professional Staff Hiring
Besides, mostly the independent contractors come with a higher level of expertise and skills. They have special skills according to the specific field of work. Therefore, it saves time, cost of training, and they prove to be more productive.
You Can Reduce The Risks Of Potential Lawsuits
The official employees have various rights under laws. Hence, they have the right to file legal cases against their employers in case their rights get violated. In addition, independent contractors do not have much protection by laws. However, they do have enough rights to receive minimum wages and overtime compensation depending on the hourly wages. Additionally, they can take sick leave/maternity leave as well and form a union when they get deprived of these rights.
The Following Is The Comparison Of Independent Contractors And Employees
- Independent contractors have the freedom to work with multiple clients.
- They are free to set their work hours themselves.
- Typically, independent contractors decide the way they want the results to turn out.
- Independent contractors do not get company-related benefits.
- The employees cannot work with more than one employer.
- Work hours for employees get declared by the organization.
- The hiring firm controls all the policies and the way the job gets performed.
- The employees are 100% eligible for all kinds of employment benefits.
In conclusion we found that independent contractors are self-employed much like freelancers. Above all, they have to pay self-employment taxes themselves and are responsible for their quarterly tax payments as well. On the other hand, employees don’t get such benefits. However, they do receive stability, immense assurance, and various other benefits.
Consequently, hiring an independent contractor proves to be fruitful for the brand/enterprise as they bring uncountable skills and knowledge from one place to another. However, if you want a consistent worker, hiring an official employee would surely prove to be beneficial for your business.