In this Jan. 15, 2019, photo Chris Richardson CEO of Talent Response, a website that helps small businesses find freelancers, poses for a photo in Boston. (AP Photo/Charles Krupa)Tips for using independent contractors, D-3
It hasn’t been lost on small business owners that Uber and other ride-sharing services are enormously successful without having employees doing the work. It’s one of the reasons why small companies are forgoing employees in favor of independent contractors.
Todd Miller transformed his small business a year ago, shifting Classic Metal Roofing Systems of Kentuckiana from a company with employees to one using independent contractors. The change gives Miller more flexibility in doing roof replacements than he had with a small group of full-time employees.
“We can hire independents who have the experience and skills that we need for each individual project. With employees, you are often asking people to do things they are not terribly experienced at,” Miller says.
Using independent contractors or freelancers has many benefits besides flexibility. In a tight job market, owners can more easily find independents rather than full-time employees. Owners can also save on overhead, hiring only when they need help. They don’t have costs like employment taxes and insurance, nor do they face the administrative and management tasks that go along with having employees. But the government has rules about the use of independent contractors, contending that some owners misclassify employees and call them independents to avoid the costs associated with employees – starting with Social Security and Medicare taxes that combined cost owners 7.65 percent of staffers’ compensation.