As the economy is reportedly slowing, again, some analysis of the improved job market does show some interesting trends. While the unemployment rate has dropped in the last few years, much of that comes by way of temporary or contract labor. What does this really mean for employers and employees?
Loopholes and Lagging
One of the main appeals for a business to hire temporary or contract employees is financial. Since employees are considered full-time or meet the criteria for a standard employee, businesses can get away with not offering healthcare coverage and generally have little to no payroll tax liability. From a business standpoint, these are ideal conditions for getting the work done with minimal expense to the company portfolio.
This isn’t to say that all temporary or contract positions are bad ones. Many people can and do benefit from being able to have this flexibility in a job. Consider a working mom who needs that flexibility to fit with their children’s schedule. Being employed by a company willing to allow a reduced expectation in number of work hours is a rare occurrence.
The key lies in anticipating those extra challenges with being a temporary or contract worker. Expect additional tax liability and healthcare coverage expenses. Properly planning for both can keep you out the trouble with tax debts or buried under a pile of Ohio bankruptcy inducing medical bills.