What are Independent Contractors?
Independent contractors agree with a business or firm through a written contract that details the duties, pay, responsibilities, etc. of each. This independent contractor agreement is then executed independently of the business or organization by the independent contractor. In this way, independent contractors differ from employees because they are not entitled to typical employee benefits such as health insurance, retirement benefits, social security, etc. They work at their own pace and on their terms as long as they fulfill the conditions of the contract.
Who are IC’s?
An IC can be any individual or any business that performs services for another person or company under an agreement but is not subject to that person or business in the manner, means, or right to control their performance of those services. The company that hires an independent contractor is not themselves liable to others for any acts or omissions carried out by the independent contractor.
Your employment contracts may make provision for overtime to be worked by employees when the business requires it. Even so, some employees are quick to find excuses as to why they cannot do overtime just then. An independent contractor, on the other hand, sees any assignment as a business opportunity, regardless of whether it demands working over a weekend, public holiday or after regular business hours.
What is the Workload Like?
Unfortunately for independent contractors, it is often either feast or famine, so if there’s work on offer they tend to grab it, regardless of whether they already have a heavy workload. The situation might then arise that they can’t meet your deadline, but you will quickly learn whom you can always rely on.
What if the IC Disappears?
If an employee were to abscond, you have to follow the proper statutory procedure e.g. wait the appropriate period to establish their non-return, send the required notices, hold a disciplinary hearing (even in absentia) and then dismiss. It takes time and costs the business money. With an IC, your agreement will stipulate “no work, no pay”; and you can employ a replacement immediately.
Independent contractors are appointed based on a portfolio of work, reputation or referral, which should be proven evidence of competence. If for whatever reason, you find yourself with someone who does not deliver, it is relatively easy to terminate the agreement. It is crucial to have a comprehensive agreement in place to establish their status, determine the payment schedule, confidentiality provisions and ownership of work.
There may be legal or practical reasons why a business cannot classify a significant portion of their employees as independent contractors. However, if contractors are used in conjunction with permanent staff, their work may challenge employees and motivate them to better performances.
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