Job Advice

Is Job Security Better as a Contractor or Employee?

As you navigate the employment and business world, you may wonder how you can get the highest level of job security. You might be considering working as a contractor or an employee. Here's some information about both arrangements and which one is more secure.

Contractor Versus Employee

As an employee, you operate as a permanent or seasonal worker for a company on a part-time or full-time basis. You receive hourly wages or salary, and you may also receive benefits. As a contractor, you operate as a small business. You are not entitled to benefits or any unique offerings that an employee of the company would have. You may have a little more flexibility regarding your pay and schedule, but you lose the benefits you may need. Additionally, you may have to deal with a problematic third-party payment processor if the company you're contracting for chooses to use one.

At-Will Arrangements and Job Security

Most contractor situations and employment situations are considered at-will arrangements. That gives you the freedom to end the relationship at will. The employer may expect two weeks' notice from you, whereas a contracting business relationship may not.

At-will relationships go both ways, meaning that an employer or business can end its relationship with you at any time as well. The company is not obligated to give you a reason at all, and the reason doesn't even have to be justifiable or valid.

Which Situation Is Best?

The truth is that you don't have job security in any situation unless you sign a contract for a specific amount of time. However, you may be eligible for unemployment compensation if an at-will employer terminates its relationship with you. You will not have that same right if a company you contract for decides that it no longer wants your services. That's something to consider as you try to make the best decisions for your well-being.

Now you have a bit more information about contractor versus employee situations. Though no situation is guaranteed, you can use the information to choose which one is right for you.