Why don’t U.S. businesses migrate to third-party employer system?

January 28, 2013

Currently, the U.S. is experiencing some growing pains. Businesses are struggling with new regulations and taxes as well as the implementation of the Affordable Care Act in a sluggish economy. Many businesses are going through lay-offs trying to make the math work and keep their doors open. At a time like this, I wish for my home country the ability for businesses to take advantage of the benefits a third-party employer can offer...

As unemployment rates continue to run high in the West and the financial burden of Obamacare becomes clearer to employers in 2013, more companies are looking to (wherever and if possible) hire independent contractors instead of employees to cut costs. While this may not be comforting to existing employees and perhaps sound intimidating to out-of-work job seekers, this proverbial cloud does have a silver lining.

By hiring through a third-party employer such as Tiger-Consulting, businesses can offer would-be consultants a number of “employee like” benefits. Third-party employment services can protect contractors by providing them with group health insurance and unemployment benefits, at no added cost to the company for which they work.

In America, employers must withhold income taxes, withhold and pay Social Security and Medicare taxes and pay unemployment tax on wages paid to an employee. They do not have to withhold or pay any taxes on payments to independent contractors. If contractors don’t pay into the unemployment insurance system, they are not covered when they lose their job. They also don’t have access to health coverage.

Tiger-Consulting’s own staff and team members the firm has hired to support satellite operations for its 100+ global enterprise clients enjoy a hybrid contractor/employee model, which provides access to traditional employee benefits while clients can offer freelance talent added protection and incentive without making benefit contributions.

Hiring through a third-party employer such as Tiger-Consulting allows businesses to easily offer the hybrid contractor/employee model to protect freelancers AND cut costs. It’s also an added hiring incentive that attracts top freelance talent at home and abroad. The model certainly is an added benefit to working with us. It could also help so many struggling businesses in the U.S. I hope this is a trend that continues.

If you have questions about this topic or about establishing satellite operations overseas from Asia and Europe to North and South America, contact us by phone or via email at info@tiger-consulting.net.

Sincerely,
Neil Satterwhite
Founder & CEO, Tiger-Consulting

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