Small businesses make up a large portion of America’s economy. Here in New York, there are more than 2 million small businesses across the state that provide jobs for more than half the state's workers. Whether they run a small convenience store or a start-up firm, business owners know that their workers play a significant role in keeping the cash flow moving. However, hiring full-time employees can create expenses that expand beyond their hourly wages.
Because of this, small business owners may want to consider hiring independent contractors instead of full-time employees to help their business remain competitive and profitable in a crowded market.
Types of services these workers provide
Contract work has become a popular trend across the United States, especially after the Great Recession. In many cases, contract workers are much like small business owners themselves, but usually provide specialized services. These types of workers include anyone from freelance writers, accountants, and even grounds and maintenance workers.
Difference between employee and independent contractor
Under New York state law, employers typically provide employees with a set salary and benefits. An employer may also have to set specific hours for an employee and provide close supervision. With independent contractors, the relationship between the two is slightly different. While they perform duties for the employer, an independent contractor usually has more control over their work and are free from employer direction and supervision. Independent contractors also typically have their own insurance coverage and can set or negotiate their pay rate.
Benefits of hiring independent contractors
As a small business owner, these are some of the benefits hiring independent contractors can provide:
- It can save the business money by cutting out health insurance and 401k expenses.
- It can increase office space.
- It can bring people with niche skills in the door.
- It can reduce software and equipment expenses.
- It can reduce employee training expenses.
- It can reduce workers’ compensation liability.
Small businesses can grow with the right tools
By hiring independent contractors, small business owners can create more value for their organizations while saving money along the way. If you are a small business owner and have questions about the legalities of hiring independent contractors, an experienced employment law attorney can help address your concerns to make sure you are complying with labor laws here in New York.