It is a win-win situation, they carry their own professional liability insurance, etc., cover their own worker's comp, (as do I), and get paid better and faster than the average employee because I can pay them better for their services (lower overhead for me). Checks are issued when they hand me the invoice, so they don't even have the pay period lag most employees have.
You are right on. I told my dh the employee- employer relationship is over. I have set goals for us to be self employeed or for me, subcontracted in two years. I hope we have enough time. I plan on bring the kids into it by four years. Obamacare has ended the security of working for someone else.
A lot of people try to get around labor laws with the ‘sub contractor’ situation. And for a pay by the job basis, you MIGHT get away with it. But the very first time you require them to show up at a specific time and do not allow them to leave without threat of losing money, they become employees.
Many a mechanic shop has learned this the hard way. They get away with it for a time, until someone rats them out.
Be darn careful the ‘subcontractor laws’ have and are changing making it nearly impossible to hire anyone as an independent contractor!
If they do the same work as you...they are an employee!
There are a few grandfathered exceptions, but most of it is being forced(audit) away.
I am curious as to what sort of work they do?
I 1099ed myself one full year about 23 years ago.
The IRS ended that practice about the same time it got started in Vegas construction but they still allow it in Arizona.
Problem is too many of us do not pay unenjoyment, workers comp, fica, etc. IRS sent me a letter years later but went after the contractor.