Q: I can’t add to headcount right now, can I hire independent contractors instead of employees?
A: Not unless they truly are independent contractors. Any worker hired as an independent contractor must meet both IRS and state tests required to fit into that category. Businesses are advised against avoiding increasing headcount by adding independent contractors instead of employees without first assuring that the legal test for independent contractor status is met. One detractor from independent contractor status is where the contractor does work that employees also do as may be the case in this scenario. An alternative may be to add workers through a temporary staffing firm.
For more information on independent contractors, click here.