One of the proudest moments that entrepreneurs have is getting to the point where they are hiring people to work for their company. In many ways, it is a huge step both financially and ideologically. 
 
In the US, workers generally operate under two designations: employee or independent contractor. It is important to be aware of the type of worker you are hiring, because making mistakes can be very expensive. 
 
What is the difference between an independent contractor and an employee? 
 
Generally speaking, you owe more obligations to an employee than an independent contractor. This means that many business owners try to hire independent contractors, even at the expense of misclassifying them. Doing this can be extremely expensive in terms of tax liabilities and other legal consequences. 
 
One of the biggest differences between an independent contractor and an employee is that an independent contractor typically works for multiple clients. The quintessential independent contractor is a freelancer. They work for multiple companies at a certain rate and may choose to take on work or decline it at will. 
 
On the other hand, an employee typically works for one company. They typically only work for that one company and may work at a designated office place. 
 
Which should I hire? 
 
This really depends upon the type of business you are running and the sort of people you are looking to work for you. There is no one good answer to this question, but you need to ensure that if you are working with individuals who should be legally designated as employees that you are hiring them as such. Hiring employees and calling them independent contractors can have serious consequences.