Hiring a Contractor vs Hiring an Employee

When deciding whether to hire someone directly or to offer someone contractor employment, there is more to consider than you might realize. You may think that it’s simply your decision—do you want this person to be a regular “W-2” employee or do you want this person to be a “1099” contractor? The reality is, it’s not all your choice. The IRS strongly regulates whether someone is a contractor or an employee. Here’s what you need to know.

Control Freaks Shouldn’t Hire Contractors

Is it important to you that your contractor works set hours in your office and uses specific tools that you provide? Well, then, you want an employee, not a contractor employee. A contractor needs the freedom to work how they choose. They generally need to provide their own equipment and set their own schedules. You can specify the work that needs to be done, but you don’t get to choose how they do it. If the very idea of an employee with such freedom makes you nervous, remember, a contractor isn’t an employee. That’s the whole point.

To keep reading, click here: Hiring a Contractor vs Hiring an Employee

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4 thoughts on “Hiring a Contractor vs Hiring an Employee

  1. In your article is the statement, “With a contractor, you can simply say, “I’m not renewing our contract,” and that’s that. It’s purely business.”

    For an in-depth look at how this idea is playing out with “traditional” employees / job seekers in a major segment of the job market, the following book is suggested:

    Down and Out in the New Economy: How People Find (or Don’t Find) Work Today (2017) by Ilana Gershon

  2. One of my favorite contractors has top notch computer skills — and a wife “with benefits”. When he was working at the company where I met him, he was there until my then-manager told him they needed him to switch from hands-on programming to writing a Requirements Document. He replied: no, you need someone else, when should be my last day?

    1. That’s the beauty of being a contractor–provided you have a spouse with benefits.

      I worked with a genius programmer contractor for years. She would come and go as she pleased. “I’m taking six weeks off,” she’d say. We’d all say, “yes, of course, do come back,” because try as we might, we were never able to find someone as good as she was.

      She also used to set alarms to get her Pepsi out of the freezer. So, you’d be talking to her and the alarm would go off and she’d excuse herself to get her slightly slushy bottle of Pepsi and put her now thawed half drunk bottle in the freezer. Then she’d set another alarm.

      I miss her. She was amazing.

  3. Also something of note, don’t fill out all/most of a department with contractors. Employees (salaried) can be made to cover the load temporarily when a contractor or two leave, but if you try have contractors cover the responsibilities you will likely blow your budget.

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