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Hiring Contract Workers vs. Full Time Employees

Many companies struggle with the decision to hire contract workers as opposed to full-time workers. While contract workers offer more flexibility, there are stringent rules that must be followed to ensure that they don’t become employees. If your company is trying to decide between contract workers and full-time employees, what factors need to be considered?

Full-Time Employees Are Harder To Get Rid Of

Employees have rights that contract workers don’t have. For example, an employee can file a grievance or take the company to court to challenge a wrongful termination. Employees also have the right to a minimum wage and certain group benefits if they are offered to other employees.

Contract Workers May Not Be As Loyal

Contract workers may have multiple clients at the same time. If you are hiring someone to handle your credit card processing and merchant accounts department, you may want someone who is going to look long and hard at the numbers each day. You want someone who is motivated to provide your company with the insight that it needs to grow.

It May Be Harder To Communicate With Contract Workers

The IRS provides clear and strict guidelines as to what constitutes a contract worker as opposed to an employee. One of the rules companies must abide by when it comes to contract workers is that you can’t control their hours or provide them with materials. Therefore, it may be difficult to communicate with a worker in another timezone who doesn’t respond to emails or phone calls until after the close of business where you are.

Employees Can Be Trained

If you want someone to head the department such as one that oversees credit card processing and merchant accounts, hire an employee. That person can be trained and molded to work in a way that adheres to company policies and values. Contract workers cannot be given training or they will be classified as employees.

Do you want a contract worker or an employee? For short-term projects, contract workers could be the way to go. However, employees can be trained, supervised and expected to follow company policy. Therefore, they are better for long-term contracts or important positions.


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