10 Tips for Employers Chances are, your small business already uses independent contractors for some job functions, or could benefit from using them. ICs, variously referred to as self-employed, consultants, independent business owners, or entrepreneurs, are people who contract to perform services for a business but don't have the legal status of employees. The ICs, not the employer, control how and where the work is accomplished, and they use their own equipment and supplies. There is hardly any job that ICs don't perform, from construction to accounting to computer programming to nursing.
Businesses can save time, money, and headaches by hiring ICs instead of employees.
Besides paying an employee a salary and other compensation, the business owner must also cover payroll taxes, unemployment, and workers compensation insurance and employee benefits such as health insurance, paid vacations, sick leave, retirement benefits, and life or disability insurance. Thus, even though ICs are often paid more per hour than employees doing the same work, an employer can still save money by hiring them. In addition, hiring ICs instead of employees reduces exposure to some types of lawsuits, such as those alleging job discrimination or wrongful termination. Perhaps most important, ICs provides a level of flexibility that can't be obtained with employees. You can hire an IC to handle a specific project, gaining specialized expertise for a short time period without going through the trauma, potential severance costs, and lawsuits that can stem from laying off or firing an employee.