Business has been good; so good, in fact, you need to hire more people. The big question on your mind is whether you hire employees or do you begin hiring contractors to complete the work? Most business owners know how the employer/employee relationship works. Here is a list of some important things to know about using contractors in your business.
What is a Contractor?
First, you need to understand what a contractor is. At its base level, the contractor is considered self-employed. You aren’t responsible for tax withholding and reporting. The contractor is not covered under your worker’s compensation, and they are not eligible for any company benefits. The IRS has specific guidelines on the difference between an employee and a contractor. If you have any questions on what the criteria is, you can read form SS-8.
What Control Do You Have Over a Contractor?
From a worker standpoint, you can tell the contractor what the job entails, outline the project, and go over expectations and due dates. You cannot require specific time and day commitments, however. This may be a bit different if you are contracting with another company to sub-contract out their employees to you. For example, if you need contract safety staffing, a safety company would send the worker who best fits your needs.
Benefits of Using a Contractor.
There are many benefits to hiring a contractor. We’ve already touched on that you are not required to withhold taxes. There are other tax advantages for hiring contractor. Your business tax is affected by the number of employees you have, and therefore it may be beneficial to keep your permanent, full-time staff below a certain number. Perhaps the biggest draw is that you can increase your workforce as needed for a specified period of time, and then decrease when the project is over.
As you can see hiring contractors has some definite pluses, but only you can decide if contractors are right for your company. For more information on contract safety staffing, please contact Code Red Safety. Reach them online at http://www.CodeRedSafety.com and for more help like us on Facebook.