Employees and Independent Contractors
There are disadvantages of hiring of permanent employees and independent contractors for a given task. The advantage of hiring someone as an employee is that one will have pride in the company and have a sense of belonging. This is an aspect which can increase productivity and overall performance in the workplace. Another advantage is that the wages which are given to employees are ussually much less than those of independent contractors, this is because independent contractors have an hourly rate which should be met for any work done, not matter how minor it is (Lawlor & Willey, 2017). This is especially because they have job security and the negotiations for the job and wages are given do not change depending on other external factors. The other advantage is that an employer can delegate some of the duties to the employees. According to Lawlor & Willey, (2017) This ensures that one has enough time to do tasks which suit them as employers. Also, the employer does not need to scamper off looking for a contactor when work increases as opposed to having a contactor. When one depends on independent contractors, it may cost a lot to hire a freelancer when there are urgent jobs which need to be done.
There are advantages of having independent contractors to employees and one of them is that even though one is should pay more for an hour for the contractor, the employer saves a lot because the contractor is not entitled to benefits and compensation which is necessary for full time salaries (Riley, 2007). There is a great opportunity for flexibility because when one has hired a certain contractor and does not like his or her work, the employer is not entitling to hire them again. This is opposed to employees who one should stay with the during the period of the agreement and incur costs on dismissal. The other advantage is that one can hire the right person which the perfect skills and expertise for a job in the company (Riley, 2007). This is opposed to employees who can act as jacks of all trades resulting to poor work done which can be a detriment to the society. many of the contactors are ussually experienced due to the years doing a work and therefore do not need to be trained like employees.
There are legal liabilities regarding having an employee in business as compared to having an independent contractor. This is because each category has one fundamental issue of any term of employment know as a liability. According to Carlson, (2017) unprecedented damages and injuries during employment can have a significant impact on the job and the business. The general understanding is that the employer is usually responsible for the employees’ negligence, however, this does not apply to an independent contractor. This is especially if it is determined if the employer had control over the activities of the employee. This would ensure that damages which happen in the place of work can be covered by the insurances when it is a full-time employee as opposed to independent contractors.
The employee is like to be entitled to have compensation for unemployment when the business of the company lays him or her off or terminates the employment. These are some of the issues which are given under the Labor Law Legislative Acts of the employees and the employer (Carlson, 2017). Failure to fulfil it can be held as a criminal activity which can invite serious liable consequences. The other liability is that the employee can only be terminated for a sound reason and given due notice of termination if employment. The employee is also entitled to receive compensation in case there are injuries during activities in the business promise or working hours within (Riley, 2007). Therefore, the employee can have stiff penalties involved due to the breach of a term of Labor Laws and the provisions of terms and service of employment.
Misclassifying of employees can have a tremendous impact to any business or organization. There are serious financial consequences which an employer can face due to misclassification of employees. If it a situation of an independent contractor, it may face the agony of the audit of the sate department of taxation and have serious consequences in the long run (Mathieu, 2016). When it comes to the hour or day, the organization can find itself in a class action matter where individual lawsuits can be launched and be taken to court. In this case, the organization will have to pay the wages owed and the matter of overtime. Rice & Poloche, (2010) noted that, it will include the many other penalties which can arise due to the mistake of misclassifying an employee and would include the fees of an attorney where there are court cases.
Employees who are non-complying may be forced to pay the amounts which were withheld and be paid on the behalf of the employees. According to Mathieu, (2016) those employees who were misclassified as independent contractors and have sustained physical injuries and had been given to rely solely on the compensation benefits of workers would file cases of negligence. This would then result in the company being held liable and ordered to pay the employee his compensation and incur other penalties such as penalties, taxes, and fees for the attorney (Rice & Poloche, 2010). Therefore, misclassifying an employee can be a very costly affair and one serious mistake which can happen to a company. Nonetheless, if the company takes the right preventive measures, one can save the company and himself a great deal of negative exposure and money.
In conclusion, there are advantages of having an employee and having an independent contractor. Every employer should be able to discern between the two and come up with a frame work of his business or organization. This framework would enable him or her to determine the kind of jobs which need to have an independent contractor and those which can be done by normal employees. Also, the employer needs to be conversant with the Labor laws acts and other state regulations on employment so that he or she can understand what is expected of him or her as an employer. This would save the employer from the challenges which come up after the misclassification of the employees.
References
Carlson, R. (2017). Employment by Design: Employees, Independent Contractors and the Theory of the Firm. SSRN Electronic Journal. http://dx.doi.org/10.2139/ssrn.2919670
Lawlor, L., & Willey, S. (2017). Are Your Workers Employees or Independent Contractors? Three Exercises to Help Students Accurately Classify Workers. Journal Of Legal Studies Education, 34(2), 167-205. http://dx.doi.org/10.1111/jlse.12060
Mathieu, C. (2016). 2016/12 ‘Independent contractors’ working in a subordinate relationship may in reality be employees (FR). European Employment Law Cases, 1(1), 36-38. http://dx.doi.org/10.5553/eelc/187791072016001001013
Rice, C., & Poloche, S. (2010). States crack down on employers' misclassification of employees as independent contractors. Employment Relations Today, 37(1), 73-84. http://dx.doi.org/10.1002/ert.20287
Riley, J. (2007). Employees or Contractors? Engaging Staff Following Work Choices, and in the Light of the Proposed Independent Contractors Legislation. SSRN Electronic Journal. http://dx.doi.org/10.2139/ssrn.1361329
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