As the gig economy continues to expand, more and more individuals are pursuing freelance or subcontracting opportunities to earn extra income or as a full-time career. However, some may wonder if it`s possible to maintain both a subcontractor status and an employee relationship with the same company. The short answer is yes, it`s possible but it requires careful consideration and adherence to laws and regulations.
The distinction between being a subcontractor and an employee is based on the amount of control the company has over the work being done. Subcontractors are typically hired to complete a specific project or task and are responsible for their own schedule, resources, and methods. On the other hand, employees are generally hired for a longer-term role and work under the direction and control of the company.
In some cases, a company may hire a subcontractor for a short-term project or to fill a temporary need, but then offer them a job as an employee. This can be beneficial for both parties as it allows the subcontractor to gain experience with the company while providing the company with a trusted and familiar employee.
However, there are some legal considerations to keep in mind if you`re considering both subcontracting and employee work with the same company. First, the IRS has strict guidelines for classifying workers as either employees or independent contractors. If a worker is misclassified, it can result in significant financial penalties for the employer and potentially for the worker as well.
To avoid misclassification, it`s important to clearly define the nature of the work being done and the level of control the company has over the worker. Subcontractors should have a written contract that outlines the scope of the work, payment terms, and deadlines. They should also have the freedom to manage their own work and resources, without being subject to the same level of supervision as employees.
If a subcontractor is offered an employee position, it`s important to carefully review the terms of the employment agreement to ensure that it doesn`t conflict with any existing subcontracting work. The employment agreement should also clearly define the worker`s duties, pay rate, and benefits.
In summary, it`s possible to be both a subcontractor and an employee for the same company, but it requires careful consideration and adherence to legal guidelines. Subcontractors should take steps to ensure that they`re properly classified and that their work is clearly defined and independent. If an employment opportunity arises, it`s important to review the terms of the agreement to ensure that it aligns with any existing subcontracting work. By being diligent and informed, it`s possible to successfully navigate both roles and achieve career success.