As a business owner, you may be faced with the dilemma of either hiring employees or getting independent contractors. How can you tell that independent contractors will be the right fit for your business? While they have many advantages, they also have certain drawbacks. Here is a breakdown of the pros and cons of independent contractors (ICs) to help you determine if they are the right fit for your business.
You Will Save Money
As much as the money you pay ICs per hour will probably be more than what you could have paid an employee for the same job, hiring an IC is cheaper. Employees come with a number of expenses, such as social security, Medicare, workers’ compensation insurance, office space, etc.
When it comes to ICs, you have more freedom to recruit and let them go than permanent employees. This is a good option, especially when the workload keeps fluctuating. You can hire an IC when there is work and let them go when work has ended without any potential legal trouble.
Reduced Exposure to Lawsuits
Employees usually have many rights under both state and federal laws. As such, you can be exposed to various lawsuits if you violate any of those rights. On the other hand, ICs are not protected by many laws. For instance, an employee has the right to form a union or has protection against employment discrimination. These are rights that may not be available to independent contractors.
Drawbacks of Using Independent Contractors
Less Control Over Your Worker
Unlike your workers, who you can monitor, ICs have the right to decide what is the best way to handle the task you have given them. You cannot interfere too much with an IC’s work.
They Come and Go
ICs are only hired when needed. This means they come and go, which can be disruptive. You may also get uneven quality work because of using different people.
You May Be Liable for Any Injuries an IC Suffers While Working
If your employee gets injured at work, workers’ compensation insurance will cover the expenses. ICs are not covered, which means if they are injured while working, they can sue you to get compensation.
If independent contractors are right for you, then you will need funding to hire and pay them. If you need financial assistance, contact Scarlan Capital Group. We can provide you with the capital needed to bring in ICs to work for you.