What’s the most important resource for a business? If you thought capital, you’re halfway there. If you thought customers, you’re about three quarters of the way there. But if you thought employees, then you’ve hit the nail on the head. Without employees, businesses can’t function, they can’t grow, they can’t earn revenue, and they certainly can’t service customers. Even if you’re a sole proprietor, you’re essentially the only employee of your business. In that case, you may not have a team of employees working together, but you are certainly the only employee of your company.
When it comes to your employees, there are several ways you can classify them, all of which dictate their level of pay, their access to benefits like healthcare, retirement pensions, paid time off, and even their tax liabilities. Some of these different classifications can also impact the ways in which you go about operating your business. With full-time employees, you’re mandated by law to provide benefits and healthcare options. With part-time employees, you may only be responsible for some benefits, but not all. But with independent contractors or freelancers, you’re not required to pay for or provide access to benefits. However, you would be subjected to the terms of the contract that you’ve signed.
These are all important distinctions to consider, and each of them can play an active role in how you go about staffing your business. That’s why it’s so important to consider how you choose to classify your employees, because a misclassification of employees could end up with a lawsuit in a worse case scenario. In fact, the financial implications of misclassifying your employees and independent contractors could even be enough to put you out of business entirely.
This eBook is designed as a structured guide to help you better and more clearly understand the differences between employee classifications. We’ll parse the differences between independent contractors and salaried employees, and we’ll look at the rights of independent contractors. From there, we’ll swiftly examine the business impact of hiring independent contractors and salaried employees, before finally outlining the various implications that you may face in the event that you misclassify your employees.