Watching your company go from a little-known business to booming can be exciting. It can also be a little anxiety-inducing. You need someone to help you fill orders, stock product, or make deliveries. Or maybe you need someone to set up a website or manage your social media page. Unfortunately, you may not be able to hire an employee just yet. Perhaps you cannot afford to pay someone for regular, part-time hours, or maybe you are not set up yet for income tax withholding. Whatever the situation, an independent contractor could be the answer. How can you tell? The following information may help.
What is an Independent Contractor?
In its simplest definition, an independent contractor is someone that works for themselves, not your company. You are not responsible for paying their taxes, you do not have to provide health insurance or carry workers’ compensation to cover them, and you are not liable for their actions while they are working (note that there may be exceptions here). You simply pay them for the work they have done and, if necessary and desired, continue to do so. Then, come tax time, you file the appropriate form to show that you paid a contractor for work.
Of course, few things in life are ever simple; hiring an independent contractor is no different. There are limitations and exclusions that may apply, depending on your situation. Further, there are certain criteria that must be met before one can be considered an independent contractor, including whether:
- The employer decides when, how, and where a job should be completed;
- The employer trains the worker before they perform a job;
- The employer controls the hours that are worked;
- Taxes are deducted from the worker’s payment;
- The employer furnishes the tools, materials, or software needed to complete the job; and
- The employer’s right to discharge the worker (i.e. termination versus ending a contract).
Is an Independent Contractor Right for Your Business?
Only you can truly determine whether an independent contractor is the best bet for your company. However, if you are in a situation where you only need a small amount of assistance, would prefer to avoid hiring (for any reason), or are concerned about liability issues, an independent contractor may be the most favorable choice. Still, it is important that you speak with an employment law attorney to ensure you have considered all your options. The guidance of an attorney can also help you avoid an accidental misclassification.
Contact Our Schaumburg, IL Employment Law Attorney
At the Miller Law Firm, your company is our top priority. Dedicated and experienced, we can assist you in determining whether an independent contractor may be appropriate for your needs, and we can help ensure you reduce the risk of litigation from an employment misclassification. Schedule a personalized consultation with our Illinois employment law attorney to learn more. Call 847-995-1205 today.