Independent Contractors In Illinois: What Are They?
Contents
An independent contractor is someone you hire to do work for your business that is not your employee.
Usually independent contractors are self-employed or work for another business.
They do specific jobs and choose how and when to do the work.
Some examples might be:
- A graphic designer who makes your business logo
- A plumber who fixes a leak in your office bathroom
- A cleaning service that cleans your office
Independent contractors usually:
- Use their own tools
- Decide how to do the work
- Work for other clients too
- Work in a different industry than your business
Why it is Important for Small Businesses in Illinois
Independent contractors can be a good option because:
- They're great for one-time jobs: You don't need to hire a full-time plumber if you only have one leaky faucet.
- Less paperwork: You generally don't withhold taxes or file employment paperwork.
- Less responsibility: If they make a mistake, you're usually not responsible.
- Save money: You don't pay for their tools, training, or benefits.
But be careful. It's important to know the difference between an independent contractor and an employee.
Getting it wrong can be costly.
If you classify someone an independent contractor when they should be an employee you could be subject to:
- Fines and penalties
- Back taxes and interest
- Lawsuits by employees
- Enforcement action from Illinois and federal governmental agencies
- Legal liability for your employee’s accidents or mistakes which cause harm
- Loss of government contracts
- Damage to your reputation
Deciding whether a worker is an employee or independent contractor can be obvious sometimes. Other times it can be very complicated. Understanding the difference helps keep your business compliant with Illinois and federal law and avoids costly mistakes.
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Disclaimer: The information contained in this article has been prepared by Small Business Legal Solutions LLC for general informational purposes only. Nothing in this article is intended to constitute legal advice on any subject matter. The materials in this article are not intended to and do not create an attorney-client relationship. Do not act or refrain to act based on any information contained in this article without first personally consulting with an attorney. Every circumstance is different and must be judged on its own merits.