Employees vs. Independent Contractors
What’s the difference? An individual is considered an independent contractor, if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done. An employee, however, under common-law rules, is anyone who performs services for the payer, who controls what will be done and how it will be done. And that’s not all…as a business owner, you especially need to avoid misclassification when dealing with the IRS, as it can be very costly.
Which one should I choose?
There’s really no right or wrong answer to that question. I can say that there are *definitely some pros and cons to both that make the debate, for some, a bit easier to resolve. Some business owners are convinced that working with an independent contractor is affordable and sometimes a great investment, while others are still concerned about the loyalty, performance and managerial efforts of an independent contractor. Research plays a great deal in your decision, as you’ll want to know all of the ins and outs of hiring one versus the other. If you don’t have time to research, partner with a virtual assistant to handle that for you, shortlisting your options.
Other articles in this series:
10 Tips for Startups
MMDM #85 → #1 Managing your Startup Costs and Generating Cash Flow
MMDM #86 → #2 Build your Business Budget
MMDM #87 → #3 Protecting your Assets
MMDM #88 → #4 What is ROI?
MMDM #89 → #5 The Business Plan
MMDM #90 → #6 Gaining the Competitive Edge
MMDM #91 → #7 Contracts, Contracts, Contracts