When is an employee not an employee? When you use a contractor
Depending on your circumstances, you could be better off hiring a contractor for a particular job rather than employing a staff member. A contractor can come in to do a particular task and once that task is finished, so too is the contract.
Just what constitutes a contractor versus an employee is becoming increasingly hard to work out. As a rough guide, a typical contractor is someone who:
- Does a one-off task for a set amount of money
- Can delegate the task to others as they choose
- Achieves the result in any way they see fit
- Uses their own resources to do the job
- Carries the financial responsibility if the work is defective
- Gets no other benefits from the employer.
By paying per job/contract, it could work out cheaper for you than hiring someone on a part-time basis. You would only get this person in when and if you need her/him.
Be aware though that a contractor relationship must clearly be established according to the guidelines. Just because you and the contractor believe it is a contractor relationship, the courts might find differently as they look at the intent of the relationship rather than the agreement.
If you are in doubt whether it is a contractor or employee situation, ask your accountant or government employment and labour department for advice as there are legal and taxation issues involved.
