Like most of running a business you are constantly making decisions where there is no right answer. Hiring is one of these instances. Depending on the business environment, there are different reasons why a company may or may not want to rely on full-time employees or independent contractors.
What’s the Difference?
Put simply, W-2 and 1099 employees are differentiated by the tax forms used to report their incomes. Full-time employees file income with IRS Form W-2, which details all wages and earnings for a year. Independent contractors receive IRS Form 1099, which accounts for wages, salary, and tips. From a business-operation perspective, 1099 workers aren’t direct employees of your company so they are governed under a different set of laws
Pros and Cons of W-2 Workers
Pros and Cons of 1099 Workers
In the end, whatever your reasons for choosing to go one route over the other, you should be fully aware of the logistical, legal, and operational consequences that come with your choice of employee.
Not sure what makes sense for you? Give CLS a call and we can walk through your needs and growth plans to help you design the right employee structure for your business.
Gain a competitive edge in the marketplace and free up valuable time and resources to focus on growth and innovation.
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