With the development of telecommuting, the line between being a contractor and an employee is becoming less explained. Somebody who works from home and provides output-oriented work for you (a common setup with independent contractors) may turn out to be an employee naturally according to the law. Misrepresenting the status of a worker has proven to be damaging for a lot of companies, being asked to pay large charges by the court once it was learned that they failed to successfully identify the employee-employer partnership. The incorrect tag has also cost several employees, who have job descriptions that match an employee status, but were not able to have their rightful benefits because they were addressed as contractors.
To help you determine the line between employees vs. contractors, the Australian Taxation Office has released a simple-to-use table or check list that explains the difference involving the two worker statuses. Primary distinctions include:
- Contractors run their own business and can give services to many other companies, while employees work just for the company.
- Contractors can easily hire other people and assign the tasks, while employees are never permitted to pay someone else to finish their work.
- Contractors can choose their own work-flow and operating hours, while employees' task is managed and instructed by the company. Other identifying factors include things like the payment setup, the provision of benefits and tax requirements.
For many small business owners, identifying what's best for their business operations-hiring a full-time worker or perhaps hiring a contractor-can be a challenge. They may learn that getting a contractor helps save them from covering legit responsibilities like insurance coverage and medical services required for employees, but then, a contractor mostly requests a greater fee to make up for the zero benefits. Business owners need to allot lots of time training and guiding employees how to handle work processes, but in doing so can guarantee the quality of work processes. On the other hand, they depend on contractors to finish their own job, and along the way may learn from effective and efficient strategies. There are lots of advantages and disadvantages to both sides, and business owners must make the decision according to what they think suits their needs and capacities.
An advised strategy for small enterprises is to work with a combination of employees and contractors according to the task available. They can have contractors for regular or specialised jobs such as completing and submitting taxation papers or maybe enhancing their quarterly publication. Then, they can hire employees for positions that demand ongoing, regular and special consideration. Regardless of the status of the worker, however, it is important that the hiring process guarantee only the most committed and extremely competent workers to be a part of the team.
If you are a business owner, you need to take into consideration the characteristics with employees vs. contractors. To learn more, click here http://www.dolmanbateman.com.au/2053/employees-vs-contractors-part-1/
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