Entrepreneurs struggling in a tense economy may try to reduce some wage costs by replacing employees with independent contractors. Some of those who follow this strategy decide to lay off staff and hire independent contractors, while others may reappoint some or all of their staff as independent contractors. This reclassification may result in lower wage costs and more profitable workers, but it is not without major risks. Being an independent contractor can be an advantage for a worker: some workers like to be independent contractors because they are their own boss and they have the opportunity to earn more money than employees. Independent contractors work every hour they want, hiring other workers to help them finish jobs, have the right to refuse repairs they don`t like and can work for more than one company. Although independent contractors do not receive paid overtime, do not receive paid benefits and pay their own taxes and allowances, they often earn much more than workers, especially if they work effectively and hire the right workers. The main drawback of an independent contractor is the economic risk of running one`s own business and the loss of legal protection afforded to workers. Financial factors focus on whether the company has the right to control the economics of the worker`s work. The test focuses on the worker`s investment in equipment used to perform the work, the extent to which labour costs are reimbursed, the worker`s ability to earn or lose money, the worker`s ability to work for others, advertise and obtain a visible business location.
, and the method of payment. When a worker uses the employer`s equipment, is reimbursed for expenses, is isolated from the risk of loss or the possibility of profit from the body shop, that he only works for a particular company and is paid by the hour and not on the basis of commissions, the worker is rather salaried. Behavioural factors examine whether the body shop has the right to control how the worker does his work.