Description
Scenario 1: Imagine you own a small business and after a year in business you have decided to hire a bookkeeper for 2 hours every Friday to bring your books up to date and to process payroll. You want the work performed at your business using the business's computer and software. The bookkeeper's work is very specific and you are paying $25 per hour.
Scenario 2: Imagine you start managing your family's business and after taking the job you realize the business hasn't had its bank statements reconciled for a year. None of the checks have been recorded in the checkbook or in the company's bookkeeping software. You hire a bookkeeper to help you get things in order. They have to put all canceled checks in order, enter the missing checks in the bookkeeping software, and reconcile the bank statements using the company's bookkeeping software. This is a one-time project that you estimate will require 2 weeks of work. You are paying $25 per hour.
Scenario 3: Imagine as the new manager of the family business you also decided to institute a new policy for handling expense reimbursements to employees. You hire an accountant to prepare the procedure manual for the finance department and prepare a new section of the Employee Handbook. The accountant must meet with company employees to gain an understanding of the new policy. The accountant will be paid a flat fee for the two tasks.
Analyze the scenarios above using a minimum of 1,050 words and include the following:
- Compare and contrast the three scenarios in a table including:
- Whether the person hired in each scenario is an employee or independent contractor.
- The reasons why the person hired in each scenario is an employee or independent contractor.
- Explain the pros and cons of hiring someone as an employee versus an independent contractor.
- Discuss what, if any, legal liabilities and responsibilities a business has for its employees as compared to independent contractors.
- Discuss the consequences a business might face for misclassifying an employee.
Cite at least 4 recent scholarly references.
Format your paper consistent with APA guidelines.
Paper must pass less than 5% plagiarism checker.
Explanation & Answer
Attached.
Employee versus Independent Contractor – Outline
I.
Employee versus Independent Contractor
A. Wages
B. Company policies
C. Role performance
D. Contract duration
E. Safety of employees
Running head: EMPLOYEE VERSUS INDEPENDENT CONTRACTOR
Employee versus Independent Contractor
Name
Institution
1
EMPLOYEE VERSUS INDEPENDENT CONTRACTOR
2
Employee versus Independent Contractor
Scenario 1
Scenario 2
Scenario 3
Employee or
In the first scenario
The book keeper is an
The person hired in
Independent
the person hired is an
employee and as the
the third scenario is an
Contractor
employee and this is
scenario portrays the
independent
because the offering
number of hours that
contractor. The
of the services is
the individual should
characteristics of an
dictated by the
work and the use of
independent
employer where there
the company software
contractor are present
is stating of the
in the recording of the
and this includes
number of hours
transactions. The
setting of the time that
worked and the use of
employee is working
the contractor visits
the company software
under the instructions
the employees. He is
and computer. The
of the employer in
offering consulting
employer specifies the recording of the
services that includes
s alary paid per hour
information of the
the setting of the
and this classifies the
company in the books
accounting policies
individual under
and this necessitates
and in understanding
employment.
for the classification
of the functioning of
as an employee. The
the organization the
book keeper role is
accountant meets with
outlined as the
the employees in
reconciliation of the
getting the
EMPLOYEE VERSUS INDEPENDENT CONTRACTOR
company accounts.
3
information on the
functioning of the
organization.
Employee
Independent
Contractor
Pros and Cons of
Pros
Pros
hiring an employee
An employee works
An independent
versus and
under a specified
contractor works on
independent
contract by the
their own terms and
contractor
employer.
they dictate the time
1.The pros of hiring
that they are engaged.
an employee is that
Pros
there is direct and
1. They perform their
control of the work
work as specified in
that an employee
the contracts with
performs in the
minimal supervision.
organization
2. As an employer one
2. There is assignment saves money in terms
of the role and the
of the costs of training
responsibilities that an and salary obligations
employee should
to the employees
perform.
(Kiely, 2011).
3. It is to train an
3. Reduction of the
EMPLOYEE VERSUS INDEPENDENT CONTRACTOR
employee in
legal obligations
enhancing the
towards the
operations of the
employees.
organization.
Cons
4. There is delegation
1. There is less
of duties to the
control of the work
employees meaning
that the contractor
that they are focused
handles and this
in the achievement of
means that there is no
the needs of the
control on the
organization.
decisions that they
5. Employees are
make.
aware of the strategies
2. The signed contract
that the company uses
determines the
in enhancing its
duration of period that
objectives leading to
the contractor works
reduced costs of
meaning that one
training.
cannot fire the
Cons
contractor.
1. The laws and
3. The company is
regulations governing
liable for the injuries
the employee-
that contractor incurs
employer relationship
during the time of the
4
EMPLOYEE VERSUS INDEPENDENT C...
