More Companies Explore Hiring Independent Contractors Versus Employees
ATLANTA, March 16 /PRNewswire/ -- Business Attorney David M. Walker, Esq. finds himself consulting an increased number of clients on the pros and cons of having independent contractors as opposed to employees. At the end of the year, companies issue independent contractors IRS form 1099 to reflect the compensation paid to the contractor; on the other hand, employees are issued IRS form W-2 that discloses the salary paid by the company.
As first quarter of 2010 draws near, businesses are evaluating their fiscal health and exploring additional cost saving options. One of the trends taking place in the human resources sector involves the transitioning of current employees to independent contractor status. Business Attorney Walker finds that some employers view outsourcing to an independent contractor as a viable cost cutting option while maintaining productivity. On the other hand, employees are considering the contracting option as an opportunity to work for more than one employer and having flexible time.
"For corporations or LLCs using independent contractors, the company pays the contractor and does not have to withhold income, social security or medicare taxes for those contractors. There are no unemployment taxes payments by the company on what the contractor earns. Contractors are required to pay their own taxes and be prepared to facilitate their own benefits. On the other hand, the benefits of having employees include, having the opportunity to prioritize and oversee management of the employees' time; while avoiding dealing with IRS challenges in the misclassification of employees as contractors, which could create some uncomfortable tax liability for the company. An IRS determination that a contractor should have been treated as an employee are red flags that often trigger tax audits and lawsuits, so consult your tax and legal advisors," shares Attorney Walker. www.DavidMWalkerEsq.com.
As companies search for balance with positions that are best suited for a contractor, as opposed to those that should remain employees, employers should understand the pros and cons of both. For employers and employees alike, it is important to make the proper distinction.
About Business Attorney David M. Walker, Esq.
David M. Walker, Esq. is Managing Partner at The Law Offices of David M. Walker in Atlanta, Ga. Walker is a business attorney that specializes in mergers, acquisitions, divestitures, financing transactions, contract negotiations and private placement of securities. He has extensive experience in taking private companies public and raising capital. Prior to forming the firm, he was a corporate attorney for Bodman LLP in Detroit; President and Corporate Counsel for Hansen Gray & Company, Inc., a venture capital firm focused on hi-tech investments; and Corporate Counsel for Celsia Technologies, Inc., a public company that specializes in the use of nanotechnology to cool electronic components. He holds a Mechanical Engineering Degree from the University of Michigan and a Juris Doctorate from the University of Detroit-Mercy School of Law. Walker is licensed to practice law in the states of Georgia and Michigan.
For more information on David M. Walker, or The Law Offices of David M. Walker please contact Courtney Rhodes at 404 549 8050 or [email protected]. www.urbanitycommunications.com.
SOURCE The Law Offices of David M. Walker
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