Offering the hybrid contractor/employee model through a third-party employment service allows businesses to protect freelancers AND cut costs. It’s also an added hiring incentive that attracts top freelance talent.
San Diego, CA (PRWEB) August 06, 2012
Tiger-Consulting, an American-owned and managed HR, Payroll and Business Services Outsource Firm specializing in helping global enterprises to successfully expand and do business in the Asia marketplace, outlined today how third-party employers protect independent contractors by making available to them benefits that are typically enjoyed only by traditional employees. As unemployment rates run high in the West, and more businesses are utilizing independent contractors to cut costs, Tiger-Consulting is encouraging American enterprises to hire freelancers through third-party employment services that can protect contractors by offering them employee-like benefits at no added cost to the company for which they work. Tiger-Consulting’s staff members hired to support Asia satellite operations for the firm’s 100+ global enterprise clients enjoy a hybrid contractor/employee model that provides access to traditional employee benefits while clients can offer freelance talent added protection and incentive without making benefit contributions.
“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,” said Tiger-Consulting Founder & CEO, Neil Satterwhite, an American Expatriate with over 40 years in HR and payroll management.
According to Satterwhite, some individuals prefer to go the contractor route that offers more flexibility, and a higher hourly rate, but no benefits. Others want to be an employee, which provides more predictability, benefits and less risk. As the economy continues to struggle in the West and companies are looking to cut costs by offering more independent contractor positions in lieu of traditional employment, the Tiger-Consulting CEO says more novice contractors are entering the workforce with little understanding of the risks involved.
“If you’re a long-term contractor, you most likely know the rules and pitfalls, but there’s a growing number of Americans out there who are new to contracting—they’re taking freelance jobs because they’re more readily available right now—and many are unaware of the going rates for contract work or how expensive individual health coverage is or how much they need to save to cover their own unemployment,” said Satterwhite.
The Tiger-Consulting founder asserts that one of the key benefits of traditional employment in the U.S. is unemployment insurance. American employees have unemployment benefits while contractors typically do not. He says that some Americans who get laid-off from their traditional positions with benefits will take a contractor job thinking that they will collect unemployment on the previous position if freelancing doesn’t work out. However, by then, he warns that access to unemployment compensation may have already expired.
“If an American loses their traditional job, unemployment compensation eligibility greatly depends on what state they are in, how much they made and how long they’ve waited to file. Wages earned over the last 15 months are taken into account, so waiting too long could result in being paid less or not qualifying for benefits at all, even after paying into the system for 30 years,” Satterwhite added.
At Tiger-Consulting, contractors enjoy a hybrid contractor/employee position that offers benefits. Freelancers cover the cost of benefit contributions rather than the companies for which they work. However, contractors pay into group policies under the firm’s umbrella, which significantly reduces the cost the freelancers would otherwise pay for individual employment insurance or healthcare policies. When a contractor is between jobs, they can remain technically employed by Tiger-Consulting, and maintain their contributions to unemployment and medical insurance. If a contractor is laid-off or terminated, they can also collect unemployment pay.
“As a third-party employer, Tiger-Consulting’s hybrid model solves the security challenge for our own staff as well as the team members we hire throughout Asia on behalf of more than 100 business clients. Our contractors enjoy the best of both worlds: flexibility, higher hourly rate AND predictable benefits,” said Satterwhite.
While Tiger-Consulting concedes there are services that offer unemployment insurance to contractors, the firm’s CEO says that policies are often costly and pay-out conditional (not guaranteed). He adds that unemployment insurance services and individual healthcare policies provide assurance to freelancers who can afford them but recommends working through a third-party employer that offers group benefits at a greatly reduced cost.
“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. The model certainly is an added benefit to working with us,” said Satterwhite.
Founded by an American Expatriate with more than 40 years of HR and payroll management experience (the last 22 years based in Asia), Tiger-Consulting is committed to making expansion and management of satellite operations in Asia easier for international businesses. The HR, Payroll and Employment Outsource Firm now supports business operations for 100+ enterprise clients across 12 Asia-Pacific countries including Australia, Cambodia, China, Hong Kong, Indonesia, Korea, Malaysia, Philippines, Singapore, Taiwan, Thailand and Vietnam.