Examples of Independent Contractors and Employees

By hrlineup | 09.01.2020

There are different types of jobs in a company, some of which can be handled by salaried employees and others are designated to contract employees. The decision to hire independent contractors or employees lies solely on business owners and is determined by the business’ needs. The mistake you can make as an employer is thinking that these employees are all the same, because they are not.

By definition, an independent contractor is the type of employee whose employer does not have any right to control or who is paid directly from the kind of work they do. An employer does not have a right to direct such an employee on how the work should be done or when it should be done as long as the employee can meet the deadline and produce the desired results. Independent contractor examples are those employees who come in as needed to perform various tasks in a business, say to fix and perform minor repairs. Such employees are paid in an hourly basis or as per the contract.

Full-time employees, on the other hand, work solely for the company and their employers have direct control over what they do, how they perform their duties and when they should perform those duties. Even if it is not mandatory, full-time employees receive benefits such as vacation and healthcare benefits on top of their salaries. Again, a salaried employee must be paid on time, whether the business is doing well or not.

There are both advantages and disadvantages of hiring independent contractors and salaried employees, and the choice a businessman makes is guided by their needs and the kinds of tasks their business wants to be performed. For the day to day management of a business, a full-time employee is the best choice. Such an employee enjoys job security and in return, they give you guaranteed services and an assurance that they will work for the overall good of your business. Salaried employees are usually not paid so well, when compared to contractual employees and so, a business can save a great deal of money by hiring full-time employees.

The independent contractor status can also save you a lot of money since you do not need to pay benefits for them. Again, you only pay for the performed tasks, with no commitments to a salary. When the business is not performing well, you can always do without employees on contract, hence saving more on company resources. The problem is that a businessman may lose control over how tasks are performed when dealing with employees on contract. You do not get to monitor the work closely and so, cannot guide them on how you want the tasks done. Besides, most of these employees work away from the business site.

Hiring an employee vs. independent contractor is a decision everyone in business needs to make on their own, with the guidance of their business needs. Make the right decision and enjoy the benefits that come with it.