Question

why do catering businessess have employees instead of imdependent contractors?

Answer 1

Although the wages can be same or different between an employee and a contractor for the same job, the primary differentiating factor from a employer's perspective between employing an employee and contractor is the level of control the employee has on the person concerned (permanent employee vs contractor). The employer has full control on the activities the employer asks employee to do including the work hours, pay, requirements to comply with labor laws etc. The employee also has right as per the labor laws under which the employee is employed. The contractor on the other hand is bound only by the terms and conditions mentioned in the contract. Thus the control and obligation of a person employed as employee is more than that a person employed as a contractor.

Catering business, by nature as it's related to food and health, requires the employer to ensure high level of cleanliness, hygiene, and security as any lapses could lead to deterioration of quality of the products which can lead to losses or even health issues from bad products. This can lead to huge reputational and legal losses in extreme cases. Thus from a management perspective it makes sense to ensure the quality of its personal but employing permanent employees rather than taking risks with contractual employees. Moreover, properitory secrets like some special recipes or secrets are too risks to be shared with contractual employees as they may leave the firm taking the secret with them.