So you think you know everything about Independent Contractors and how to define them from an Employee? Do you know that top common misconceptions?  If so, then Kudos to you. So for the other millions that are unaware on how to classify an Independent Contractor and are not aware of the misconceptions, I am here to help.

Our podcast explains the difference between an independent contractor and an employee. The courts and government agencies use many factors to determine independent contractor status. Calling someone an "independent contractor" does not make him/her an independent contractor in the legal sense. Mislabeling a worker as an independent contractor creates potential liability for employment taxes and penalties, and liability for failure to fulfill the many legal obligations owed to an employee, such as wage and hour requirements. For your own protection, make sure that a person working as an independent contractor truly meets the difficult tests required by law.

So you decided to hire an independent contractor instead of a new employee to handle certain tasks, and now you’re experiencing a bit of sticker shock. Why should you pay $80 an hour for a freelance PR consultant when you’d only pay her $35 an hour as a salaried staff member? Is she gouging you? No, she’s not. Independent contractors incur a range of small-business expenses, much like your company, so it’s unfair to compare their rates with the wages of an in-house employee.