The Great Debate: Employee or Independent Contractor?

Making the decision to be a contractor or a full-time employee is a big decision in many careers.  There are certainly positives and negatives to each and there are questions you should ask yourself before you make any decision. If you are currently a contractor being offered a full-time position with a company you are freelancing with, there are several things to consider:

1) Why does the company want to bring you on as a full-time employee?

      • The department you work for recently received approval or is receiving pressure from HR to hire-full-time
      • Proper classification of workers which involves compliance with government entities such as the Department of Labor (DOL) and the IRS. The government is trying to collect taxes from independent contractors that are acting as employees and they are going after the companies that use them. You might fall in this category depending on the IRS 20 factor test.
      • Save money. Putting you on salary saves money if there is a lot of work to be done. As a salaried employee, they would typically be paying you for 40 hours a week regardless if you work 50 or 60
      • They really like you! They want you to contribute to the culture and team. They are afraid of you doing work for a competitor because of your skills.

Considering why the company wants to hire you for a full-time position can help you decipher whether it’s about compliance, purely financial or about working with you as a valued employee.

2) Why would you decline the full-time position and stay a contractor?

      • You prefer an independent career and working on a variety of projects
      • Flexible lifestyle. You complete the work in the way you think is best.
      • You typically make more money per hour as an independent contractor because you are responsible for your own taxes and benefits
      • You have established clients you’d like to keep a relationship with
      • Short-term contracts suit you better
      • Undesirable commute
      • Not interested in working with this particular employer/team full-time

The answer to these questions are largely based on the type of style you’re looking for in your career. If you already feel as though you’ve established yourself as a freelancer and feel that a full-time position is not for you, that is the decision you have to make.

If the client is urging you to become an employee because of compliance and you want to stay independent, then consider going through a staffing agency. You will be an employee of the agency and they will handle your taxes and benefits plus the client is free from compliance issues.

3) Why would you accept a full-time position?

      • Benefits, salary, steady pay and all the perks of being a full-time employee
      • Reliable workload
      • Enjoy company culture and want to be more integrated into a team
      • A rare opportunity
      • Not enjoying contractor lifestyle
      • Tired of being your own salesperson and accountant. 

Again, accepting the full-time position is all about your personal preference. Do you enjoy full-time work, like the company and are you ready to give up the flexibility of contracting?

Considering all of these questions can help you decide which course of action is right for you. Additionally, many contractors feel a full-time position is their only option for benefits or being in compliance but they should consider contracting through a staffing agency. Staffing agencies take care of taxes and many offer benefits such as health insurance, 401K, PTO and dental/vision as an option to maintain their contractor status with client companies.

Interested in both full-time and contract job openings? We have both! Check out our jobs and connect with us today.

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