Contractors and Employees
* In a series of previous posts, I have:
I will assume for now that all managers and employees have some understanding about what an employee means. Employees are "supposed" to be permanent (until the next round of layoffs), usually must work on-site, and are "supposed" to have some emotional and financial investment / stake in the welfare of the company. The employer gets to tell them what to do and how to do it. They also have rights which contractors definitely do not have.
Trying to define what a contractor is and is not is murkier. Part of that is because the IRS does not like contractors, since it is harder to collect taxes from them.
Amazingly, the definition of a contractor is not objective, but subjective. Everyone who is not a contractor is an employee. Get it? This really should be objective. It is not.
Many companies and enterprises treat their contractors almost like employees and are likely in violation of tax and employment law.
If a business is closely managing contractors, requiring them to work on-site, telling them how to do their jobs, making them work on weekends, hiring them over a long period of time, that business is exposed, at risk. A single phone call, anonymous letter or e-mail to the IRS can cause the business sustained legal and tax problems. The IRS can investigate such matters for an extended time after the events happened.
* This version of the post was edited. The original was badly written. My bad.
- Crafted a brief narrative showing a mix of success and failures in hiring and managing contractors. NB: Employees have vastly different incentives and workplace experiences than properly managed contractors.
- Analyzed the narrative from the standpoint of winners and losers, and show a glimpse of the effects of power imbalances between the various parties.
- A (admittedly quick and non-comprehensive) guide to using contractors. This post is the tl;dr edition, so interested parties should read between the lines and be thorough. I hope to write another post about this topic soon.
I will assume for now that all managers and employees have some understanding about what an employee means. Employees are "supposed" to be permanent (until the next round of layoffs), usually must work on-site, and are "supposed" to have some emotional and financial investment / stake in the welfare of the company. The employer gets to tell them what to do and how to do it. They also have rights which contractors definitely do not have.
Trying to define what a contractor is and is not is murkier. Part of that is because the IRS does not like contractors, since it is harder to collect taxes from them.
Amazingly, the definition of a contractor is not objective, but subjective. Everyone who is not a contractor is an employee. Get it? This really should be objective. It is not.
Many companies and enterprises treat their contractors almost like employees and are likely in violation of tax and employment law.
If a business is closely managing contractors, requiring them to work on-site, telling them how to do their jobs, making them work on weekends, hiring them over a long period of time, that business is exposed, at risk. A single phone call, anonymous letter or e-mail to the IRS can cause the business sustained legal and tax problems. The IRS can investigate such matters for an extended time after the events happened.
* This version of the post was edited. The original was badly written. My bad.
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