Should you hire an employee or an independent contractor? Pros and cons


So you need new talent to lighten the workload, but you’re not sure how much to commit. If you’re wondering whether you should hire an employee or an independent contractor, you’ve come to the right place. First, you need to break down exactly what you need and what you can afford.

Depending on your resources and projects, an employee may be better than a contractor. On the other hand, there are a few unique advantages to hiring a contractor. Here at Komando HQ, we’re always happy to provide tips for small business owners.

For example, we’ve put together a guide on how to introduce remote workers to the team. Tap or click here for a few ways to onboard someone who works from home. In general, many factors come into play when analyzing the pros and cons of contractors and employees. Keep reading to find the best answer for you.

The Risks and Disadvantages of Hiring Contractors

The main difference between an employee and an independent contractor is the amount of control you have over the way they work. Sure, you can assign them tasks and ask them to respect deadlines. But they’re not part of your business, so they don’t have to follow all the house rules.

Self-employed people, for example, often set their own hours. They may even work for other companies while they work for you. Compare that to an employee: as an employer, you can write contracts asking them not to work for other companies.

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So if you need to supervise the people who work for you, an employee is better than an independent contractor. However, if you only want to fill a peripheral position, consider a contractor. They are also great for short-term projects that you need to complete within a certain time period.

You will find another advantage in using independent contractors when tax time rolls around. You must report how much you paid them on Form 1099-MISC. But you don’t have to worry about paying FICA taxes, so that’s a big plus.

Keep these restrictions in mind

Contractors are temporary workers. Sure, you can renew their contract, but if you need them by your side for a long period of time, it’s better to hire a new employee.

You also can’t fire contractors the same way you would let an employee go. There are several rules in the game. Here’s everything you need to know about letting a contractor go

Also, do not demand loyalty from the company. Since they are not employees, contractors are under no obligation to promote your brand and ignore your competitors.

You’ll also need a written agreement if you want copyrights to any work they’ve created. For example, you can hire a contractor to take pictures or write articles for your site. If you do not take the necessary steps to obtain copyright, the contractor may recycle their photos and articles for other companies they work with.

You may even be liable for it… under certain circumstances

For the most part, you are not liable for what independent contractors do. However, there are a few exceptions to keep in mind. Suppose a contractor injures someone while they are working for you. If you have been negligent in instructing them, you could be held liable for any harmful accidents.

For example, you can hire a contractor to mop your floors. If someone comes in and slips, they could get you in trouble for not instructing the contractor to put up a warning sign.

You may also be responsible to contractors if you have the right to control the way they perform their work. Here are a few more examples of how vicarious liability can get you in trouble

The best place to find talent on the internet

Small businesses have unique needs and it’s more important than ever to have the right people on your team. That’s why I trust LinkedIn Jobs help out. LinkedIn Jobs matches your open position with qualified candidates and posts your post to members every day so you can hire the right person faster.

Find the perfect match for your company with LinkedIn Jobs. And for a limited time, post a job for free – visit LinkedIn.com/kim to get started today

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