Given the country’s economic situation, some businesses have contemplated using independent contractors—instead of hiring employees—as a possible way to save money. Keith Clouse, a Dallas employment law specialist, notes that a company should carefully weigh the pros and cons of relying on independent contractors before altering its staffing plan.
Using independent contractors can be advantageous. A company could save money because it would not have to pay for Social Security and Medicare taxes, health benefits, unemployment compensation insurance, or workers’ compensation insurance for its independent contractors. Second, using independent contractors allows a company to adjust its workforce according to its workload, without having to fire employees or compensate underutilized employees.
But disadvantages exist. Chiefly, independent contractors are “independent,” and a company cannot closely supervise or control an independent contractor’s work. Further, doing so puts the company at risk not only for being investigated by a governmental entity for misclassifying employees as independent contractors, but also for related back taxes, interest, and penalties.
To speak with Mr. Clouse or with another attorney at a Dallas employment law firm, please contact the employment law lawyers at Clouse Dunn Khoshbin LLP at [email protected].
