week 8 a

.docx

School

University of Cincinnati, Main Campus *

*We aren’t endorsed by this school

Course

BUS101

Subject

Economics

Date

Feb 20, 2024

Type

docx

Pages

3

Uploaded by CoachProtonGorilla100

Report
1 Week 5 From the worker perspective, what are the major pros and cons of being classified as an independent contractor? Which classification (employee or independent contractor) do you think most workers would prefer and why? From the company perspective, what are the major pros and cons of classifying a worker as an independent contractor? Besides legal compliance, what are some of the strategic business considerations that companies must take into account in determining appropriate classification? What do you think are some of the reasons why a company might choose to "push the envelope" and run the risk of misclassifying an employee as an independent contractor? Being identified as an independent contractor has both advantages and disadvantages. One major advantage is the flexibility that comes with being an independent contractor. Independent contractors are able to choose their clients, establish their own hours, and work on multiple jobs at once. The flexibility allows better work-life balance and the ability to pursue diverse opportunities. Additionally, independent contractors often have the potential to earn higher income compared to traditional employees due to the ability to negotiate their rates and take on multiple clients. I have worked for UBER, Grubhub and Instacart part-time. I was classified in the state of New Jersey as an independent contractor. I set my own schedule and 1099- NEC was mailed to me at the end of the year I could pay taxes on my earnings. The downside to being classified as an independent contracted is that independent contractors are responsible for paying their own taxes, health insurance, and other benefits that are typically provided by employers. They do not receive benefits such as paid time off, retirement plans, or healthcare coverage. Independent contractors may experience income instability as they are not guaranteed a steady paycheck and may face challenges in securing consistent work. I believe
2 most workers would prefer to be classified as traditional employees rather than independent contractors. This preference is driven by the stability and security that comes with traditional employment. Employees receive benefits such as health insurance, paid time off, retirement plans, and other perks that contribute to their overall well-being. Also, traditional employees are protected by labor laws and regulations that govern working conditions, minimum wage requirements, and overtime pay. From the company’s perspective, there are also pros and cons associated with classifying a worker as an independent contractor. One major advantage for companies is cost savings. When hiring independent contractors, companies are not responsible for providing benefits or covering payroll taxes. This can result in significant cost reductions for businesses, especially when it comes to healthcare expenses and other employee benefits. Companies may have challenges in maintaining control over independent contractors compared to traditional employees. Independent contractors operate autonomously and may not always align with the company’s goals or standards. Employers have to consider various strategic business factors when determining appropriate worker classification. According to the Department of Labor, these considerations are the nature of the work relationship, level of control exerted by the company over the worker, financial implications, and industry standards. Companies need to assess whether the worker’s role aligns with the criteria for independent contractor status based on IRS guidelines. Companies should evaluate the long-term impact of worker classification on their business operations. For instance, hiring independent contractors may provide flexibility in huge project demands without long-term commitments. There are several reasons why a company might choose to “push the envelope” and run the risk of misclassifying an employee as an independent contractor. One reason is cost
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help