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Contract Worker or Employee: Which is Better for Your Business?

When you're considering hiring for your business, you have a few different options

available in many situations. You can hire a regular employee, with benefits, taxes and similar concerns, or you can go with a contract worker, who you are not directly responsible for. However, deciding which option is the best for your company is a hard decision to make. Here's some information on all your options to help you make an informed decision on your next hire.

It's important to understand the difference between these types of workers. If you classify an employee as a 1099 worker, you may face fines from the government. If you classify a 1099 worker as an employee, they can sue for benefits, overtime and similar areas of concern. Knowing how to properly classify these workers is a big deal.

A 1099 worker is an independent contractor who provides specific services to your company. You may be their only client or one of many. They may choose to end the contract on their timeline, outsource the work to their own employees or use their own methods and tools to get the job done. This provides them with a much higher level of independence compared to a regular employee. However, they don't receive benefits from you and you don't withhold taxes for them.

A standard employee is hired for an undetermined length of time and is expected to complete work using the tools you provide with, in the manner you expect it to be completed. You control where and how they work, and in exchange, they are entitled to certain benefits, such as unemployment insurance, overtime and benefits. You have the option of hiring an employee through an agency if you don't want to deal with those issues in your company.

The decision of whether to go with a full employee, a 1099 worker or an employee through an agency is up to you and your business needs. However, whatever your decision, you don't have to go through the process yourself. At AccountRely, we can help you set up an agreement for a 1099 worker, send over an agency employee or help you find the right permanent hire for your company, just contact us today to get started.

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