Q: Contracts for contractors.
I'm starting a painting business and in the beginning I want to have contractors instead of employees so as to not kill my startup cash flow, or do contractors only work per contract?
A: You may need to discuss your business plans with a business attorney. There are many businesses that use independent contractors to avoid employment expenses. However, it is important that the independent contractor relationship is clearly defined through a contract, and that your relationship cannot be construed as an employer-employee relationship. For example, generally speaking, the more control that a business has over how someone performs their job, then the more likely that the relationship could be construed as an employer-employee relationship instead of an independent contractor relationship. The consequences of improperly treating an "employee" as an independent contractor could be costly. For instance, employers who improperly classify "employees" as independent contractors could become liable for employment taxes that were not previously paid. Another reason to make sure the independent contractor relationship is clearly stated in a contract is to limit your liabilities for damages that the contractor might cause to property on a job. A contract could help clearly define the allocation of risks. Best wishes to you!
Please note that my answers are for general educational purposes only and do not establish an attorney-client relationship. You should contact an attorney for specific legal advice regarding your situation.
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