Employment Law
5 min read

Contractors Or Employees, the what and why?

Contractors Or Employees, the what and why?
Written by
Published on
Natalie Sulimani
April 20, 2022

Like in every profession and trade, agency staff could be hired either as in-house employees or independent contractors. To avoid unnecessary liabilities and disputes, you must define the contractual relationship properly while making a contract. But how do you know which is best for your nursing agency? This article will guide you through. First, however, let’s make a quick distinction between the two.

What’s the Difference between Contractors and Employees?

A contractor is an independent and self-employed individual with multiple clients, hired to render services to a business, and gets reimbursed after completing apportioned tasks. Generally, contractors do not receive instructions from their principals on the method to discharge their duties. Therefore, they are not entitled to extra benefits outside the payment for worked hours as shown on their invoices.

An employee, on the other hand, is an in-house staff hired to work exclusively for a business, under well-defined instructions, either on-site or remotely, and is reimbursed through the company’s payroll system. Unlike the contractor, an employee is entitled to insurance covers and other benefits outside his basic salary.

Essentially, the distinction is in the degree of control the employer has, the legal security, and the compensation model.

Which Option is Best for You?

There are exactly no hard-and-fast rules for deciding which is most appropriate. While hiring staff as contractors could be relatively cheaper, there is more to running a successful nursing agency than the immediate monetary gain. Here are five factors you should consider before making your choice.

  • Duration of Contract: The duration for which the employed staff would work for your client is an essential factor. If it’s a short-term deal, a contractor will make a better option. But if otherwise, getting full-time employees is recommended.
  • Category of Professional Expertise: Not every nurse can effectively deliver all healthcare services. Your choice should also be guided by the nature of services you are to render to your clients. Nurses who have obtained certifications in areas within your scope of service may be employed as contractors as that rules out the need for training and supervision since they have the requisite expertise already.
  • Degree of Control Required: You cannot exert the same degree of control over contractors and employees. For example, only employees are bound to receive instructions from you on tools, equipment, and methods for service delivery. And for all you know, not everyone has the professional expertise to decide what would be most appropriate for different cases. Plus, hospitals most times have requirements that may be uncomfortable for some.
  • Time: Generally, hiring employees takes a longer time to announce openings, receive applications, review them for shortlisting, and then conduct interviews. If you have a tight deadline to meet, contractors would be most appropriate.
  • Cost: Finally, you should consider the cost implications. With proper management, hiring contractors is expected to be more cost-effective, as you won’t be making any further payment aside from the remuneration for worked hours.

Final Thought

You should weigh the pros and cons appropriately to identify which suits your needs before making contracts. Your choice, in the long run, would influence your growth and productivity.

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