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Should you hire employees or contractors?

| Nov 17, 2018 | Estate Planning And Probate

Being a business owner in New York can be extremely rewarding, but it also comes with its challenges. If you are a brand new company, or you are a smaller business ready to grow, it may be time to hire. Typically, the options you have are to hire traditional employees or independent contractors. There are benefits to hiring either one, and it typically depends on your specific business and what work you need done.

When determining which type of worker you should hire, you first need to understand the differences between the two. The Internal Revenue Service discusses some factors to consider, and the fact it comes down to the type of control you want to have. These include:

  • Financial
  • Behavioral
  • Type of relationship

In terms of financial, with an employee you pay for a lot more including taxes, supplies and benefits. With a contractor, you pay for the project and the contractor is responsible for paying for everything else. Behaviorally, you have more control over an employee in terms of hours and how the job is done. A contractor makes his or her own hours and decides how the job is completed. Relationship-wise, decide if you want a long-term contract with an employee and whether you want to provide benefits. It may also come down to whether or not it is a long-term position.

LinkedIn talks about some reasons you may want to consider hiring a contractor. These include:

  • Ability to hire based on specific skill set
  • Money and time are saved due to less training
  • Contractors are good at executing strategies and products
  • Greater talent pool to choose from

There are many circumstances in which hiring permanent employees is the better way to go, but contractors may fit in to some aspects of your business. Whomever you choose, make sure you speak with an attorney to ensure you are treating and paying your workers for the job designations they have to avoid litigation down the road.

 

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