Originally Posted by
Greig Whitton
There is an important legal difference between employing a worker and contracting a freelancer.
If you employ someone (even if only on a temporary basis), then you need to comply with the labour laws and any applicable employees tax responsibilities. In particular, you need to pay close attention to the new regulations for non-permanent employees that were recently introduced since there are potential severe risks (e.g. the possibility of temporary employment being "converted" into permanent employment).
If you contract a freelancer, you do not need to comply with any labour laws and don't need to worry about employees tax (provided that they are actually an independent contractor and not deemed to be an employee). You and your freelancer are simply bound by the terms of your contract / agreement (which can mean much fewer headaches).
Both approaches have pros and cons. However, if I was planning to pay someone to perform work on a temporary and remote basis, then I would seriously consider sub-contracting over employment.
The distinction between an employee and an independent contractor is assessed on a case by case basis, but key factors include:
* The intention of the contracting parties (i.e. whether you and the person who you hire intended an employment or independent relationship)
* The extent to which the person you hire is economically dependent on your work (i.e. whether they have other clients and income streams)
* The scope of autonomy and control (e.g. whether the person you hire must work specific hours and at your premises or not)
* The extent to which the person you hire uses your resources (e.g. computer) or has their own
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