ADVANTAGES OF INDEPENDENT CONTRACTORS

=> Cost

As mentioned above, main advantage of independent contractors versus employees is cost. You can get same or better service from independent contractors for a lower hourly rate than you can from employees because you don't have to incur all add-on expenses that go along with hiring employees.

=> Equipment and Materials

In addition, you don't have to provide office space or materials and equipment to independent contractors. As independent contractors (who may also go by terms "freelancers", "consultants", "self-employed", "business owners" etc.) are self-employed business people, they have their own "tools of trade". If they're website designers, they have their own office space, computer and printing equipment. If they're gardeners, they have their own lawn mower, whipper-snipper, wheelbarrow and pruning shears.

=> Legal Liability

At law, an employer is vicariously liable for torts of his or her employees. This means that if you hire an employee gardener who accidentally runs over your customer's pet cat in driveway of her home when customer had made it clear that your employees are always to park in street, in addition to suing your employee for negligence, she can also sue you, employer, as you are vicariously responsible for acts of your employees. (And, by way, this applies whenever your employee is acting within scope of employment, whether under your express instruction or not. If your employee has a car accident when traveling between jobs and his negligence at least partially caused accident, you're responsible to same extent as employee.)

This is generally not case with an independent contractor unless independent contractor has been engaged to perform an inherently dangerous activity (such as blasting) or you have attempted to delegate to your independent contractor a non-delegable duty (such as keeping a rental property you own in good repair for benefit of tenant).

In addition to minimizing legal liability for torts, hiring independent contractors also minimizes your liability for other types of lawsuits such as wrongful termination or job discrimination.

DISADVANTAGES OF INDEPENDENT CONTRACTORS

There are two main disadvantages to hiring independent contractors versus employees.

=> Misclassification

Far and away most serious disadvantage is if you misclassify employees as independent contractors. Merely labeling a worker as an independent contractor is not enough. They must actually be an independent contractor.

If you do misclassify an employee as an independent contractor, you must pay IRS all back-taxes owed, plus interest, plus penalty (12% - 35% of total tax bill).

Also, you expose yourself to an increased risk of state audits when your terminated independent contractor files for unemployment benefits. Never mind that you and your independent contractor intended that there be no employer/employee relationship, many's disgruntled independent contractor who unilaterally decides to recategorize relationship as one of employer/employee when spectre of unemployment benefits raises its pretty head. In such situations, you'd better be able to protect yourself by proving that arrangement was for an independent contractor and not an employee.

=> Legal Liability

Unlike an employee who is limited to workers' compensation benefits, an independent contractor can sue you for negligence if they're injured on job. That's what liability insurance is for though.

Normal SHOULD be waking up when your body is rested, not when alarm clock rings. Normal SHOULD be taking a vacation when it fits your family's schedule, not when your seniority allows. It SHOULD be having a parent at home when a child comes home from school.

To me, normal ISN'T sitting in rush hour traffic twice a day. It ISN'T working fifty weeks in exchange for two weeks off a year, or five days on for two days off a week. It ISN'T wearing my name and picture attached to my clothing.

Everyone must determine their own definition of what "normal" is and isn't. For those of us who have decided to step outside box, take control of our lives and build our own business, normal is anything BUT normal!

Life is full of risks, it's true. But, everything great that has EVER happened has done so with some degree of risk. I don't want to get to end and WISH I had taken just a few risks.

I'm urging you to take some risks with me! Step up to plate! Decide what it is you want out of your life and your business and GO FOR IT! FORGET ABOUT NORMAL! Create your own "normal!"

We are at very beginning of new millennium! The Internet is overflowing with possibilities, as it breaks all growth records ever set by anything, and it is just not NORMAL!

As I lay in bed, building my empire (business) on my laptop, I realize just how much I love my other-than-normal life. I wouldn't trade it for anything! The clock says 10:07 PM. Ahhh, lunch break!