After the pandemic, many businesses have restructured in an effort to remain sustainable in the current climate. Companies with fluctuating staff requirements are often now expected to go for independent contractor arrangements, which can be more attractive than hiring employees. How about you? Are you a contractor or employee? What about your employees? Do you know what differentiates a contractor from an employee?
To know if you are or your staff is a contractor or employee, the first thing to consider is your intention. What benefits do you want to get from entering into this agreement?
Businesses pay PAYE and KiwiSaver on behalf of their employees, whereas contractors pay for these themselves. Employers can decide when and where their employees should work, while contractors decide how they work and even employ subcontractors to help them. Employers provide their employees with equipment, whereas contractors often use their own. Employees also have a work schedule and may be paid overtime for working extra hours, while contractors work on agreed timeframes.
Employees get annual and sick leaves and can bring up personal grievances, while contractors don’t. Lastly, businesses hold employee records, while they only keep agreements with contractors.
What are contractor benefits, you ask? A lot of it comes down to freedom, and variation.
Businesses often engage contractors to shield themselves from the obligations and liabilities of employing staff. However, whether you’re a business owner, employee or independent contractor, you need to know your rights, so you can avoid getting it wrong and protect yourself in case of conflicts.
Contracting can be exciting and beneficial to both the worker and the business. Flick us a message or give us a buzz and let us help you through your contracting journey. We’d love to make things a lot easier for you!
Your Outside Team
Address: Level 2, 182 Vivian Street,
Te Aro, Wellington 6011, New Zealand
Mail: PO Box 24-457, Wellington 6142
Phone: 04 889 2975
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