A salaried employee is typically known as a W2 employee. The W2 workers are not the owner of their businesses unlike the independent contractors. They work for your organization, work according to your business’s needs & schedule, and participate in the benefits programs for employees. The default sorting is W2 employee for such employees, unless there is some specific reason to categorize a worker as an independent service provider.
According to the law, the W2 employees are promised at least the minimum wage that is fixed by both state and federal laws for as long as they work on an ongoing or regular basis. You can get your W2 online copy from here as well. The organizations withhold the Medicare and Social Security taxes of their W2 employees, and pay the payroll taxes. In numerous situations, an organization has the authority to fire an employee for bad performance at work or any fair, valid reasons. On the other hand, an independent contractor receives the money for the agreement both parties signed. Moreover, they are responsible to pay their own taxes.
The company offers all the supplies and tools that are essential for W2 workers. Independent contractors are responsible for their own tools and supplies. Moreover, the employees are usually compensated for the business costs they experienced during their time of employment. But this is not same for the independent services providers, unless a special clause is added into the contract.
Advantages like retirement funds, flexible spending accounts, and health insurance are provided to every employee that qualifies for such benefits. But as we discussed earlier, these benefits are not offered to the independent contractors working for a business.
Advantages of W2 Employees
Committed to your company
If you treat your employees right, they can bring a lot of revenue for your organization. They will work hard and perform well if they will feel that the organization is loyal to them. You can find a lot of loyal independent contractors too, but usually it is hard to do.
Offer more continuity
The employees are with your organizations for the long run, and they can help you according to the needs of your organization. For instance, if you need someone to focus on an important project on a very short notice, you can depend on your loyal employees to lend a hand. However, the independent contractors usually operate in specific areas.
Free up the business owner’s time
It requires dozens of skills to run a small business and sometimes you feel like that you cannot even get a break. It helps you assign specific tasks to the employees and free up your time for good.
Need to train them just once
Whenever you hire new employees, you train them according to your company’s environment. Although, they attend trainings time to time after they become a part of your company, but they are naturally aware of organizations’ expectations and policies. While, the independent contractors are not a part of your office team and you cannot always expect the work that will meet your standards.