Even though full-time employees are still a vital part of many companies, we can see there is an increasing number of organizations hiring independent contractors. That said, it's crucial for professionals in the HR space to understand what it means and how it's different from employees.
In this glossary, we shall define independent contractors and highlight some key differences between them and full-time employees.
As the name suggests, independent contractors are self-employed people who are contracted by a company to provide services for a specific project or period. Typically, employers hire them complete specialized tasks that require their particular skill sets for a specific period.
Independent contractors work under a specific contract that describes the terms and conditions of their employment, and they are responsible for their own taxes, insurance, and other benefits.
At this point, you've probably can tell what the differences are between independent contractors and employees. Employers typically hire them to complete a project for a specific period because of their particular skill sets - something that is not available within an employer's workforce.
In this section, let's dive further into the key differences. First, we can see the different levels of control the company has over independent contractors and employees. Independent contractors operate independently and have more control over how they execute tasks than employees, who are directly supervised and managed by their employers.
Additionally, when we're talking about the typical benefits when employees are hired - health insurance or paid time off - organizations are not responsible for providing those to independent contractors. This is because they are personally responsible for their own taxes and insurance.
All in all, as an HR professional, it's imperative for you to understand the difference between independent contractors and full-time employees. Once you have a clear understanding of the key differences between these two types of workers, you can ensure your business complies with the local labor law and manage your workforce effectively.