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Independent Contract Positions on the Rise
Small businesses prefer independent contractors because it is less risky and allows them to bring a greater variety of skills with several independents versus one full-time employee.
Small businesses prefer independent contractors because it is less risky and allows them to bring a greater variety of skills with several independents versus one full-time employee. They save money by not offering benefits, and furthermore, small business owners can approach hiring an independent contractor as a way to “test run” the individuals before they hire them as full-time employees.
Individuals are drawn to independent contract work because if gives them greater entrepreneurial independence. Essentially, they are running their own business, setting their own hours, and frequently eliminating their commute by working from a home office.
However, not everyone is cut out to be an entrepreneur. Know yourself and your preferred work habits before jumping into a contractor position.
Characteristics of a good independent contractor include:
*Self disciplined and self motivated. If you are easily distracted by laundry or yard work, or you work best with day-to-day guidance, then stick to full-time employment where you go into an office or store daily to do your job.
*Ability to work alone and independently. Most contractor jobs are remote positions where you will be working from your home, without daily co-worker interaction. For some, this is a great perk, however for extroverts, this can be depressing and lonely. If you love being around people, this isn’t the job for you.
*As an independent contractor, you are expected to be an “expert” in your field, with little need for direction and guidance. There are serious legal implications for businesses that hire independent contractors, but then require them to work specified hours at the place of business. If the working requirements are restrictive, then let the employer know that you should then be classified as an employee with benefits, or that the working requirements must be more flexible. Their concern should be the “end result”, not the specific hours worked.
Points to consider before taking on an independent contractor position:
• As a 1099 employee, you will now be required to pay your own social security taxes and taxes are not withheld from your paycheck. Therefore, to avoid getting blindsided at tax time, consult a tax advisor in advance to determine how much you should hold aside each pay period for future tax payments.
• Without the luxury of benefits (medical, dental, 401K, etc), you will then need to find a means to provide these benefits for yourself. If you or a family member has pre-existing conditions, acquiring individual medical coverage can be very costly and the coverage may be very limiting.
• If the company you will be working for does not have a contract for you to sign, then make the effort to draw up your own contract. There are important points (i.e., how and when will you be paid) that you will want put in writing to avoid future conflict and miscommunication.
• You are typically expected to furnish your own office supplies, computers, and any other materials needed to do the job. If travel is required, you will also likely be expected to pay your own travel expenses.
Keep an open mind during your job search. You may find the benefits of being your own boss, setting your own hours, and working from home can far outweigh the security of being a full-time employee and can open the door for many opportunities you may otherwise not have considered.
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