Working as a Contract Employee
Whenever you enter into an employment contract with someone, you should always have a written contract. (The same applies to independent contractor positions). Contract workers are employees of W-2. Only the portion of FICA taxes for employees comes from a contractor`s salary. The contract employee is usually hired for a predetermined period of time to carry out a specific project. A personnel agency deals with the payroll tax of the contract employee. As a recruiter, you must provide the reasons why leaving a full-time job for a contract position may be worth the risk. Here are a few points you may want to use when talking to your candidates about contract positions: On the other hand, you will usually get paid more for the contract due to the lack of benefits received. As an independent contractor, the terms and conditions of the work you perform are set out in a contract between you and the employer. Even if you are not considered an “employee” under federal labour law, you can still join a union. However, you should keep in mind that an independent contractor unit is not subject to the same privileges and guarantees as a regular union collective bargaining unit. For example, an employer is not required to negotiate with a union the terms of an independent contractor`s contract on how to negotiate matters affecting its regular employees. Even an independent contractor who went on strike would not be protected from employer reprisal under the National Labour Relations Act.
As a recruiter, it`s your job to show candidates the benefits of temporary work. Contract work has become increasingly preferred by job seekers in recent years. Every year, personnel service providers hire nearly 15 million temporary and contract workers. Employees are exposed to new work and training opportunities through the acceptance of contract positions. The vast majority of job seekers don`t want to get stuck in a job or culture where they don`t fit. This is where a contract job can be a blessing. This short-term role gives an employee the opportunity to test a job (and also a company) without having to worry about getting stuck in a position they don`t like or want. Training: Contract employees receive training and instruction exclusively for their projects. How many hours per job are required: Many contract positions require 40 hours of work per week and any hour longer than 40 hours should give you paid time and half, although some exclusions apply depending on occupation and classification. While there are a few drawbacks to contract positions when hiring, there are many benefits for job seekers. The ability to test a business and a job while getting paid can far outweigh the short-term and temporary nature of the role. Contract employees are typically hired for projects that require niche expertise for a short-term project.
Instead of hiring a long-term full-time employee with this expertise, a company chooses to hire a contractor for the duration of the project. Tax Form: Internal employees receive a W2 tax form and their taxes are usually automatically deducted from their paychecks. Confidentiality agreement: Depending on your industry, a confidentiality agreement may be required, especially if the contractor has entered into agreements with competitors. The risk of audits not only of the IRS, but also of the U.S. Department of Labor, the National Labor Relations Board, and the U.S. Occupational Safety and Health Administration. State tax authorities are also on their guard against poorly ranked contract workers. The integration and training process is also very different.
Because entrepreneurs are supposed to focus on a specific project, they often only get the information they need to accomplish that task, according to Kimberly Schneiderman, senior director of practice development at RiseSmart. Full-time employees, she said, need lengthy onboarding processes to understand the intricacies of team dynamics, corporate culture and overall goals. Think of a contract job as a longer interview (but with salary!). It can be difficult to tell if a candidate is as capable as they claim in an interview. Because the wrong hiring decision can be costly, employers want to make sure they know what they`re getting out of an employee. Hours of work: Internal employees have set days and hours of work. The state of the company`s budget indicates the need to reduce labor costs. Hiring employees is not cheap. Paying state and federal payroll taxes and other benefits can add 30 percent to the cost of a salary, QuickBooks says. Hiring contract employees is much easier than hiring internal employees because there is much less paperwork. .