Even if you have the best products and services in the world, you won’t get far without your team. While you may sometimes find hiring, firing, and worrying about pay and benefits to be challenging, it is a rare company that can operate with just one person at the helm running the entire show—and doing all the work themselves. And whether you are part of a start-up just gaining momentum or have been operating a business for years, you will probably always find yourself reinforcing your team.
Independent contractors offer many benefits to a wide range of businesses in the US, and following are five things you need to know if you are considering hiring them:
- They can fill in the gaps needed for projects either temporarily or for an indefinite amount of time. This type of flexibility usually ends up being a win for everyone involved. While independent contractors may not have the usual benefits that full-time employees would at your business, they usually make significantly more per hour and are able to pay for their own health insurance and more.
- You save money while they make money! Even if you are paying independent contractors more, you may save up to around 25 percent of what you would pay out ultimately for full-time employees as you are not expected to pay for health insurance or any type of paid leave. Independent contractors also must handle taxes on their own as 1099 employees, and you are not required to pay into their social security or add them to your workers’ compensation insurance.
- The potential for an employee lawsuit is kept to a minimum with the independent contractor. Although there could be complexities regarding intellectual property later if your contract does not cover you comprehensively, for the most part independent contractors rarely sue over problems with leave, discrimination, hours and pay, or union issues.
- You may not have the same level of structure that you do with regular employees at your business. While they possess the skills and talents you need for a particular project, independent contractors may not be able to give you the consistent work hours you are used to, and they may even have other clients that they are working with, thus piecing together schedules. Keeping in mind that they are not full-time employees with benefits, in many cases you cannot expect them to act as such either.
- Intellectual property issues can arise. Independent contractors are often hired for their substantial innovation skills and may be brought in to add their particular mode of genius to the creation of a new product or service. Beware though that your new innovation or concept doesn’t walk out the door later though due to the lack of a proper contract. Consult with your business attorney on drawing up a comprehensive contract so you do not lose out later or end up in a legal dispute.
If you have concerns about hiring an independent contractor or are worried about a potential legal dispute, consult with Attorney Shane Coons. Our law office represents clients involved in a wide range of businesses and legal issues, and we would be glad to review your case and help you explore your options. Call now at 949-333-0900 or email us at Shane.Coons@seclawoffices.com.