Should you hire employees or independent contractors?

It really depends on where your business is at and where you see it going. The primary difference between an employee and an independent contractor is the employer's degree of control over the worker. Whereas the employer controls how, where, and when employees perform their work duties, the employer only hired a contractor to complete a specific task and therefore only controls the result.

Because employment status affects benefits, tax credits, and employer liability, among other things, employers should carefully consider their long-term and short-term needs as well as those of any potential employee. The IRS has guidelines for separating employees and contractors and may impose fines and penalties on employers who attempt to avoid payroll taxes. 

Hiring a full-time employee means you must follow the Fair Labor Standards Act. Some small businesses may think hiring part-time employees can save costs, but some benefits may still need to be provided under specific circumstances. Independent contractors are appropriate for short-term projects or projects outside the scope of regular work, will work independently, don't get any employment benefits from the company or client, and are not subject to tax or FICA withholding but pay a self-employment tax.