Question

In: Economics

what are the advantages for employees of claiming that someone doing work for them is an...

what are the advantages for employees of claiming that someone doing work for them is an independent contractor rather than an employer what generally makes a worker classified as an "independent contractor"?

Solutions

Expert Solution

An independent contractor is a person or entity contracted to perform work or provide services to another entity as a non employee. As a result, independent contractors must pay their own Social Security and Medicare taxes. Another term for an independent contractor is a freelancer.When a worker is an independent contractor, the employer can control only the quality or result of the job not the method through which the work is done. Independent contractors need to pay for all the benefits on their own, such as social security, medical benefits, etc. They do not have access to unemployment insurance or worker compensation payments as well. All these factors classify an independent contractor and differentiates them from an employee.

The benefits for the employers to claim that some one doing work for them is an independent contractor rather than an employee are as below:

1. For the independent contractor the employer does not have to withhold  income tax, Social Security, and Medicare from wages paid, which is generally done for an employee.

2. The Employers do not have to bother about the Employment and labor laws as they do not apply to independent contractor.

3. The employer need not need to monitor the method in which the job is being done as long as the output is received.

4. The hiring procedure is also simple as compared to hiring an employee.


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