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Employee or contractor

 

Deciding between an employee or contractor

Contracting has emerged as an alternative to the traditional employment relationship. A contractor can be engaged directly as a natural person, through a trust, partnership or company, or through a labour hire agency.

Sometimes contracting is necessary, where you require specialist skills that cannot easily be obtained by recruiting an employee. Some individuals wish only to be engaged as contractors, particularly where they service multiple clients. Contracting can also prove more cost efficient than employment.

However, there are dangers in engaging an individual as a ‘contractor’ without having a proper understanding of the law. You may find that the individual is considered to be an employee at law, and this brings with it a range of legal obligations – and liabilities if you get it wrong.

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