Should You Hire an Independent Contractor or an Employee?

What’s Best for You? Here are some considerations for deciding if you should hire an independent contractor or an employee:

Length of project

Is this an ongoing project requiring continual work with no definitive end date? You may need to hire an employee unless this work requires high skills, knowledge and no direction from you.

Results

If you are only interested in the results and prefer the person has independence as to how the work gets done, you should hire an independent contractor.

You could require an independent contractor use certain scripts when contacting people and also require the contractor to enter information into specific software in a specific manner. However, you cannot tell the contractor when to do the work; you are paying for results within an agreed upon time frame.

Relationships with clients and team members

If the work that you need done requires continuous contact and relationships with clients and team members, you should hire an employee.

If you want to train someone to follow prescribed methods, communication standards, etc., you have to hire this person as an employee.

Integration with the business

If any of these apply, you need to classify the worker as an employee:

  • The person has limited risk in losing money
  • The person works only with you and not others in the general public
  • You mention this person in your client marketing materials, directly or indirectly describing them as an employee and not an independent consultant.

Commissioned sales people

Consult an expert to determine how people you hire to build business and/or meet with clients are classified according to payment of taxes and contributions.

Virtual assistants

Companies that offer virtual assistants should be treated in the same manner as companies offering temporary employment. Virtual assistants can offer their services on their own. You should consult an expert on how to classify this person as an employee or independent contractor.

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Written by Mary Dunlap

My team and I are dedicated professionals who through honesty, caring and desire, provide our clients the tools and processes for sensible, appropriate human resource management, for recruiting the right person for the right job, for coaching people to do better and to direct energies for increased business and personal results.

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