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Comment by bryan11 | Hacker News Reader

Has the increasing cost of health insurance motivated employers to start using more contract workers?

Employers have been operating without any sense of social responsibility since long before health care became a part of the national conversation.

You could entirely remove any obligation of providing health insurance from all employers, and they'd still replace payrolled employees with contract workers if it saved them a buck.

If it saved them a cent.

Yes, but they were doing this 10 years ago, so the recent increases in costs are probably only accelerating an existing trend.

Potentially. But now more than ever, companies with little to no revenue growth don't know how to boost earnings aside from cutting costs.

Probably. Do employers pay payroll tax on independent contractors? Those two items together make FTEs really expensive.

There is no requirement to withhold taxes on independent contractors. The independent contractor is fully liable for all payroll obligations. If you are a direct employee then the employer will pay half of your payroll tax (7.5%). If you are an independent contractor then you pay the full tax of 15%.

However, independent contractors are not without risk because the independent contractor is suppose to operate fully independent without your supervision. If you violate certain guidelines then you have to classify the worker as an employee which entitles them to certain rights.

It has allowed them to avoid paying for that part to make business models like Ubers, TaskRabbits etc work.

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