Difference Between Project Employees and Full-Time Employees

by Anne B. Robinson

As a business owner, you must be aware of all the intricacies of hiring the appeal for the business and the best possible ways of managing them. Depending upon the type of business you are in, you may often need the support of full-time employees, or sometimes you may need to hire some support staff.

When it comes to managing your full-time employees or project employees, there are specific rules you must follow and different regulations for each type of employee. Knowing the conditions and the regulations will enable you to skip any fines you might incur.

There are some differences between the two categories of employees in terms of the ability to work, the scope of work, the stuff you can delegate to them, payroll, taxation, and insurance.

So, here are some differences between a full-time employee and a temporary project-based employee that will help you understand the difference and navigate the workplace.

1. Employee vs. Contractor

The basic difference based on the definition of the two lies between the number of working hours and other such details.

For instance, workers you hire for a specific project may or may not work at your location, may not even use your equipment, and might not even dedicate full time to your company.

As per IRS, as an employer, you do not have the authority to ask a project-based employee to work only for you and set hours for their work. It is not authorized to expect them to clock in and out and complete a set of hours.

On the other hand, the full-time employees in your office are there for a longer tenure, they use the office equipment and most often work from the office premise. As their employer, you have the authority to delegate work, ask them for overtime, and set their specific working hours. Moreover, this employment contract is more exclusive as full-time employees are not allowed to work for others.

2. Scope of Work

When you have some in-house employees, you can expand their scope of work if the situation requires it without additional pay. You can promote, demote and shift them to other departments per the organization’s needs.

Whereas the contractor or the project employees will sign to hop on board for one particular aspect, and any other work beyond that will be considered out of scope, they can be held accountable for that.

For insurance, if you are hiring a graphic designer for your business logos and marketing collateral, it may not be worthwhile or work on anything else not mentioned in the contract.

3. Cost of Hiring the Employees

When you hire employees, you have to pay their salary and more because of taxes and other things.

You must pay their FICA tax, unemployment insurance, contributions, and workers’ compensation insurance. You might think you do not need this insurance, but that is not the case. Not only is it mandated in most states, but it also reduces your liability of paying for any healthcare of employees or any other expense incurred due to a workplace accident.

Moreover, there are other perks, such as health insurance, personal days, bonuses, cars, and travel reimbursements.

On the other hand, for a project-based employee, you can avoid paying anything above and beyond the agreed-upon amount in the contract.

So, these are some crucial differences between a project-based employee and a company’s full-time employee.

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