When hiring support for your company, it is important to determine whether you will want to hire employees or independent contractors. Both support structures come with significant differences in benefits, wages, taxes, and expectations, which is why it should be determined and agreed upon at the beginning of the engagement.
Many businesses will label workers as independent contractors to maximize their profit by cutting down on certain costs pertaining to hiring employees, often resulting in workers receiving less pay than they deserve.
Raiff Representation is here to help you navigate the proper wage and benefits structures that are necessary for each relationship. We also help ensure that workers receive the most favorable terms possible and prepare you to understand all the associated terms and conditions contained in your contract.
What is an Employee?
Employers are typically required to pay half of each employees’ Social Security and Medicare taxes in Arizona, which is a costly consideration for businesses when bringing on workers classified as employees.
Furthermore, a company also needs to consider a multitude of other possible benefits including unemployment insurance, workers’ compensation, sick pay, overtime, minimum wage, and break pay.
What is an Independent Contractor?
The following are a list of some of the criteria used to determine if a person qualifies as an independent contractor:
- Supervises their own work
- Covers their own costs for work, necessary equipment, and travel
- Provides their own tools and equipment for work
- May or may not have other clients or customers
- Decides their own hours and schedule
- Doesn’t receive training for position
- May work where and when they wish
While some people may prefer the flexibility of being a freelance independent contractor worker, there are many aspects of the hiring process to consider when looking at the needs of your business.
Freelancers don’t have access to a company’s health care or other medical benefits, they do not receive overtime, breaks, or paid sick/vacation days, and must pay Medicare and Social Security taxes in full.
Arizona’s “Right To Control” Test
In the state of Arizona, a worker’s classification is determined by a “right to control” test. This helps qualify a person as either an employee or an independent contractor.
An individual is considered an independent contractor “if he is not subject to rule or control of the person for whom work is done, except in accomplishing a certain result.”
If you believe you’ve been denied fair wages for your work, have been classified incorrectly, or if you need assistance in navigating the right contracts and relationships to consider when hiring assistance for your business, Raiff Representation can help ensure you are protected proactively and/or secure the compensation that you deserve.
Call or email us today to schedule a one-on-one consultation with a skilled employment law attorney.