?So it is contract employees vs regular employees. What is the best option? There
always is plenty of debate on the subject. The best way is to compare the benefits of
hiring contract employees Vs regular employees.
There is this theory that contract employees are not loyal or considerate of
organizational goals but reality contract employees work far more professionally and
deliver quality work because it is their work and their reputation related with it that
enables them get more work. Regular - on board - employees can be a bit laid back
because they know for sure that there check would be ready for them at the month
Contract employees get no benefits where as regular employees have plenty. Contract
employee gets no workman's compensation, no unemployment insurance, no medical
/dental/life insurance, no paid vacation, no sick time, no 401 matching. In the benefits
department in the race between contract employees Vs regular employees, contract
employees lose big time.
If one hires contract labour, he or she needs to issue a 1099. For contract employee
one doesn't need to pay employment taxes and for on board employees one needs to
pay them. Contract employees cannot sue the employers but regular can sue the
employers for unfair labor practices or discrimination.
The contract employees vs regular employees debate continues with the theory that
contract employees are not loyal or considerate of organizational goals but in reality
contract employees work far more professionally and deliver quality work because it
is their work and their reputation related with it that enables them get more work.
Regular - on board - employees can be a bit laid back because they know for sure that
there check would be ready for them at the month end.
In tax department too when it is contract employees vs regular employees, contract
employee shells out more on taxes. As a labour on contract one needs to pay both the
employee and employer portion of the Medicare taxes and social security. As a regular
employee one needs to pay just the employee portion of the Medicare taxes and social
The rate of hiring contract employees esp. in the IT sector is too high compared to the
regular employees. Using outside resource and manpower for a short term project by
hiring on contract sometimes makes more sense than adding more staff and investing
in resources which may not be used regularly after the concerned project is over.
There is greater flexibility I hiring contract employees. With one phone call you can
have a team of skilled employees working for you on a project and if not satisfied you
can send them home with another phone call, and have another team on your doorstep
with third phone call. Instead if you add additional staff as regular employees and if
the work is unsatisfactory you will have difficulty in sending them home. So for
employers this flexibility factor in the debate of contract employee vs regular
employee makes more sense. It ultimately depends on the need and specific
requirement and both contract employees and regular employees have their own
pluses and minuses, that need to be considered before opting for one