Independent Contractor vs Employee

There is a growing trend in America which traditional employees are being replaced by independent contractors. What is the difference?

As an employer looking for help, you may be debating hiring an independent contractor vs. a permanent employee.

Americans’ spirit of independence is reflected in its workforce. While job creation as a whole remains somewhat flat, one area of the economy that is booming is with independent contract work. Since 2005, 100 percent of job growth was among independent contractor and temporary positions.

Before you go hanging that HELP WANTED sign in your window, it’s important to understand why independent contract work has become so common.

There are several reasons why there’s been such a shift in America’s workforce.

First and foremost, independent contractors are less expensive than traditional employees. For one, independent contractors typically do not have access to company health insurance, paid time off and other benefits—and they aren’t up for yearly raises or bonuses. Second, companies don’t have to allocate as many resources to a contractor such as office space, computers, phones and more.

Measures such as the Affordable Care Act and the $15 minimum wage movement have contributed to driving up the cost for labor and led many companies to seek the help of independent contractors instead.

Independent contractors do not typically require the same access to buildings and files that permanent employees do. And conflicts of interest or office relationships are less of an issue.

While financial stability is usually desired by workers, it can weigh heavily on organizations. Salaried employees continue to be paid even during lulls in business while independent contractors can be leveraged — and paid — only as needed.

Full-time employees generally have rights that are not afforded to independent contractors. Hiring contract workers alleviates a company’s vulnerability to lawsuits.

Once your company has sourced an independent contractor, it can be challenging to navigate federal and state requirements. At TalentWave, we help mitigate the risk so you can focus on your business.

Contact us today to see how we cultivate the engagement of independent contractors with the workforce and find the talent to help companies succeed.


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