Contractors vs. Employees

Uncategorized Aug 25, 2021

Two very common questions I get asked are what is the difference between the two, and which one is better? I will break down the Pros and Cons below. 

 

Employees vs. Subcontractors. 

 

Subcontractors:

Choose their own hours

Choose their own prices

Choose their work clothes 

Pay their own taxes

Supply their supplies and equipment

 

Are NOT employees

Therefore, Business owners CANNOT tell a subcontractor when to work. Business owners cannot tell a subcontractor what to charge for a job. 

Business owners have ZERO control over a subcontractor and how that subcontractor chooses to do business. 

 

Employees:

Business owner determines the hours for the employee

Business owner determines the prices

Business owner sets the dress codes

Business owner pays employee taxes 

Business owner supplies what products and equipment to use

Business owners can create policies which give more oversight and decision making over employees.

 

Word of caution: be very careful about your classification and expectations on subcontractors because the IRS  will make the final decision, and if they believe your team is indeed employees you can get fined and owe employer taxes on the already paid hours of work paid to your subcontractors. A subcontractor has the ability to contact the IRS  directly if they are unhappy or believe your demands meet the criteria as employee status. 

 

If you want to have control over your business you should hire employees. Contact a local lawyer and/or CPA to help you make the right decision for your specific business.

I personally have always had employees in my cleaning business, and I had no problem in finding them too. I use Local Employee Finder and Ad Services to find the perfect employees for my business.

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