In recent times the use of independent contractors has become more and more common. There are benefits to working as an independent contractor and also benefits for the employer who hires independent contractors. There are many different factors for both the independent contractor and the employer for determining to be and to use independent contractors. Here are some of the factors:

• Being able to have mobility with their work. Working from home, work off-site or being able to work from anywhere.
• Flexibility and work/life balance. People want to be able to make their own hours and schedules, so that it will fit with their lifestyle choices.
• High cost of employee benefits for the employer.
• Eruption of employment regulations and litigation is burdensome, which most don’t apply to the independent workforce.
• When the economy isn’t going so well it is easy for employers to let go when times are slow and rehire when it picks up again. Independent contractors make it easy on employers.

What’s Most Suitable for Your Business?

Hiring independent contractors is trending and perhaps you have or contemplating independent contractors. There are some benefits of hiring independent contractors, and cost savings is usually the big factor. You have the possibility to save on payroll cost such as:

• Federal payroll tax
• Unemployment insurance premiums
• Workers’ compensation premiums
• Employee benefits, such as vacation, sick leave, retirement, disability, health insurance
• Office space and equipment
• No additional reimbursement for costs
• No overtime

Furthermore, this will reduce the exposure to some types of lawsuits such as alleged job discrimination and wrongful termination. This will allow the people working for you more flexibility with les cost and risk for you.

Using independent contractors may seem as if there are all benefits to it but employers need to be careful of the risks of hiring independent contractors:

• You still face exposure for on the job injuries
• Intellectual property complications. Businesses do not automatically own the copyright in the most work created by an independent contractor.
• Latestly, consequences of misclassification. If you are treating your independent contractor as an employee, the IRS will require you to pay all back taxes owed, with interest, and a penalty fee.

When your are deciding whether to hire an independent contractor or an employee, be sure to take all the things discussed into consideration.