In today`s changing workforce, the use of contract workers, also known as independent contractors, freelancers, or employees working for hire or reward, is becoming more common. Companies often hire these types of employees instead of part-time or full-time employees for a variety of reasons, including budget concerns and the need for specialized skills. Employers are only responsible for issuing a tax form 1099 to the contract employee in accordance with the IRS tax compliance periods. Many contract employees work remotely from a home office, so additional savings can be made by not providing office space or equipment. It makes sense to hire contract staff if you have a particular need. For example, you may need someone who is familiar with social media engagement, but you don`t need a full-time person. It can also be useful if you need seasonal help. For example, retailers often hire additional staff during the holidays to meet increased service requirements. In this case, hiring temporary or contract employees can be an effective step. While hiring contract employees can save a company money, there is a trade-off because contractors don`t have the same loyalty to a company as permanent employees. Other potential drawbacks: Hiring contract employees can be a smart business decision for a company, as there are many advantages, including: There may be a fine line that distinguishes a contract worker from a regular employee, at least in the eyes of the Internal Revenue Service. Check with an employment lawyer or directly with the IRS if you have any questions about how to classify employees to avoid possible legal pitfalls.
A contract employee is a person who is owned by a company for a predetermined period of time at a predetermined price. Under this approach, a company is not responsible for providing a variety of traditional benefits to the employer, including: When a new person joins a company, there is a period of low productivity as the newcomer learns the ropes and goes through the onboarding process. It is in the nature of things that entrepreneurs should be able to get started and start working right away, but there is always the possibility of a little downtime as a new person needs time to get acquainted with the business and its needs. Lisa McQuerrey is an award-winning writer and writer for over 25 years. She specializes in economics, finance, workplace/career and education. Among the publications she has written for are Southwest Exchange and InBusiness Las Vegas. .