Page 7 - White Paper-Independent Contractor Laws

employer’s share of payroll taxes (7%), pay into unemployment, and take out

workers compensation insurance.

However, this financial exposure is less than you might assume, and your

assumptions may be driven by some misconceptions about the actual costs and

benefits For example:

• The costs associated with payroll are not fixed, and are proportionate

to the size of your payroll, which means the absolute cost of switching

to payroll may not be as much as you think if you have a small staff or

temporary or occasional workers.

• You can still employ people on an “as-needed” basis as W2

employees, something employers commonly misunderstand. By

making someone an employee, you do not have to commit to a certain

number of hours- all that is changing is the way you pay them for the

hours worked.

• Unless you have more than fifty employees, putting someone on

payroll will not obligate you to provide health benefits.

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