Independent contractors and their position in the gig economy have been a topic of debate in the United States and around the world in recent years.
Multinational companies worldwide are constantly looking for ways to cut labor costs, while financial regulators struggle to get contractor rights, wages, and taxes in order.
When it comes to running a company, not everybody who works for you is deemed an employee. Some can be classified as self-employed.
Perhaps you’ve employed a professional copywriter to produce some advertising pamphlets for you, or maybe you’ve delegated the website design to an external web developer. These jobs aren’t your employees; instead, they’re independent contractors.
What Is An Independent Contractor?
A self-employed individual or organization hired as a nonemployee to work for or provide resources to another organization is an independent contractor. As a result, self-employed individuals are responsible for their own Social Security and Medicare payments.
Furthermore, a company that hires an independent contractor is not obligated to provide them with workplace health insurance and employer-sponsored retirement accounts that would be provided if the contractor were an employee.
Each taxpayer must be classified correctly as an independent contractor or an employee by the payer. A freelancer is another name for an independent contractor.
Independent Contractor vs. Employee
Employees are paid a set salary, have taxes deducted from their pay, work part-time or full-time, and have their job and timetable determined by their boss.
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Independent contractors are the polar opposite of employees. They are more likely to be compensated for programs, be concerned about their taxes, and serve when and where they wish.
Employers are not required to contribute to your health care, life insurance, wages, stock options, worker’s compensation, unemployment taxes, payroll taxes, or 401(k) donations if you work as an independent contractor. Independent contractors are also not entitled to job benefits or immunity under labor laws.
How Independent Contractors Work
The independent contractor is not called an employee since he or she is a different business entity. Independent contractors may serve as consultants, agents, or brokers, among other things. Others may be artists or people who work in technology.
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It’s a smart option to get a written contract from each person or company with whom you work because it spells out when the work period ends, what applies if one group needs out, and what comes if one party fails to meet its commitments.
Independent Contractor Rights
As an independent contractor, you have three real privileges. If an employer attempts to violate one of these protections, you can stand up for yourself and, if necessary, take legal action.
Right to Control
You have the freedom to manage your job as an independent contractor. While a client can hire you to do something, you, as the professional, get to choose how it is done.
For many people, this is a daunting concept to grasp. However, if anyone hires you as a plumber, you are not obligated to repair it according to their specifications. You wouldn’t have to use their unique blue plunger only because that’s what they want, for example. Instead, you’d complete the task in the most efficient manner possible.
You’ve been hired to offer a service or a commodity, and as an IC, you get to choose how you do it. If the person or team recruited you to try to dictate how you function, they’re behaving as if you’re one of their employees, which you aren’t.
Right to Work How You Like
One of the most appealing aspects of being an IC is getting to make your own rules. Do you want Sundays AND Mondays off, for example (who wouldn’t?)? Then, it’s all up to you!
Do you want your own office, or do you prefer to work from a co-working space? Once again, the option is yours! (However, if you’re going to run a company from home, make sure you’re following local business laws.)
Right to Market Your Services
You are not bound to a single client as an IC. You can work on several jobs at once as long as you do all of the work you sign up for on time.
You have the freedom to sell to customers and companies as a result. You are responsible for finding your job, and no client has the authority to prevent you from doing so. If you believe a client is attempting to force you to work exclusively for them, remind them that you have the right to consider other employment.
