I want to add something to what sibling poster said (though I agree wholeheartedly).
Paying workers for their time and not hiring them works well when said worker is very highly skilled and you will not need them for a very long time: a lawyer, a chef for an event… If you plan on hiring someone for a whole season or longer I believe the right thing to do to protect both parties is to agree on a flat rate for the season.
On one hand a contractor can leave you whenever they please, but in practice (and this is the case) the employer will have the upper hand. This is why we need laws to regulate this type of work relations (I know this might get me downvoted here). I know this probably will not happen to the typical HN crowd working as contractors, but think of a housekeeper; I believe it's very important that regulation is in place to prevent this kind of exploitation.