Transcript:
Hey, I’m Doug Jackson, founding attorney of The Law Firm of Douglas G. Jackson. Today, I want to talk to hiring, and specifically, what is the difference between an independent contractor versus and employee. You’ve worked hard to build your business and your brand. You’ve gotten to the point where you need some help. Do you hire an Independent Contractor, or an employee? The first thing you want to think about is control. Who’s going to be controlling the work? With an employee, you have much more control over what they do, how they do it, when they do it. You can require them to be at a certain place, at a certain time, to dress a certain way. You can put them on your insurance. Conversely, with an independent contractor, they’re in business for themselves. They set their own hours. They decide how they’re going to do the work. And while you can give them some guidelines, you generally don’t have as much control over an independent contractor as you would an employee. Now, let’s talk about taxes. If you have an employee, you’re going to withhold taxes from their paycheck, and you’re going to pay your share of payroll taxes. You don’t do that with an independent contractor. They’re responsible for paying their own taxes. Another thing to think about is benefits. Do you want to offer them health insurance, or a retirement plan? You generally can’t do that with an independent contractor. They’re in business for themselves, so they have to provide their own benefits. So, those are some things to think about when you’re hiring. Do you want someone who’s an employee or an independent contractor? Control, taxes, and benefits are all things to keep in mind. But there is one more major thing you need to consider: will the IRS and the law see your hire as an Independent Contractor or Employee? That’s a complicated question and requires balancing several factors. It’s something you should consult with a licensed attorney about. We’ll talk more about these tests in future videos, but for now, at least you know about the general differences between an Independent Contractor and an employee. Knowing the differences will help you get started in scaling your business. Remember, get your legal action with the Law Firm of Douglas G. Jackson.
