As a business owner, getting the right workforce for your business needs can be challenging.
There are three main categories of employment status to choose from, namely: Employees, Contractors and Workers. Let’s highlight the key differences.
Employees
Your employees are those individuals who are hired directly to work for your business. They are often bound by a ‘contract of service’ whether expressed or implied and are subject to probation and performance measures. In turn, the business or employer has a contractual right of control over the individual and provides adequate work tools, payment of wages, and pension contributions, amongst others. Employees are covered by the full range of statutory employment rights, and there exists mutuality of obligation between the business owner or employer and the employee.
Contractors
Self-employed individuals are likely to be able to control their hours and days of workwhile not being subject to employee controls or employer supervision. They are in business on their own account—for example, they provide their own tools (other than hand tools), have control over the work and how it is done, can provide a substitute, and accept risk. These contractors are contracted to provide a particular service for a particular period.
Workers
A worker is anyone under any other contract, whether express or implied and whether oral or in writing, whereby an individual undertakes to do or perform personally any work or services for another party; whose status is not under the contract that of a client or customer of any profession or business undertaking carried on by the individual.
Workers have a substantial amount of freedom over where, when and how much work is done, and mostly do not have obligations to be available for work. However, workers are under a are under a degree of control from the employer when working, receive pay for work that is set by the employer, rather than subject to negotiation and does not actively market their services.
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