Can an Independent Contractor Be Fired?

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As an employer, you may find that you need additional help here and there. However, when working out the budgets, numbers don’t allow for another full-time employee. That’s where independent contractors can come in to save the day. While they are a powerful tool to small and large-scale companies, they are only effective if you know your rights. Below, we’ll point out key differences between them and employees. Plus, we’ll get you in the know with independent contractors and taxes.

 

What is an Independent Contractor?

An independent contractor is someone hired to do a specific job. They are not considered an employee and not put on the payroll. Most of the time, companies will draft contracts to point out duties to keep things straight. Hiring an independent contractor is beneficial for several reasons but, companies should be careful how they handle them. To clarify, we’ll point out key differences between employees and independent contractors coming up.

 

Working with Independent Contractors

Just because someone classifies themselves as an independent contractor does not make them one. For example, the IRS has a long list of requirements to meet to pass as an independent contractor. Understanding the differences between an employee and an independent contractor is crucial for businesses, helping them keep all of their paperwork straight.

 

Who’s the Boss?

With an employee, the boss is the employer. In short, whoever gives them their paycheck has a right to give and take away privileges. With an independent contractor, they act as their own boss, separating themselves from the company altogether.

The Right to Fire

Employers can fire employees at any time and for any reason, so long as it is justifiable. In the case of independent contractors, as long as they have completed their work (or are in the process), they cannot be fired. If they act within the contract and produce results, they are not eligible for fire by an employer.

 

Learning New Skills

Employers often go through training when they start with a new company, learning the ropes. Independent contractors come with their own set of skills and therefore do not usually partake in any training. They will need to bring their own skills and, if applicable, seek training.

 

Scheduling

Companies are in charge of setting hours for their employees. If they need time off or need to adjust their schedule, they have to take it up with the business. Independent contractors do not. They generally get work done on their own time. While employers can set due dates, they can be pushed back or moved depending on things the contractor finds.

 

Classify Employees Carefully

While independent contractors are a great way to save money and get additional help, they’re not always the best option. For tax purposes, you’ll need to classify your employees correctly. As an employer, you want to avoid any penalties or fees that the IRS could tack on. Always keep documentation and records so that you have all you need, just in case.