Legal Definitions - hiring firm

Definition: Hiring firms are businesses that employ independent contractors instead of traditional employees. Independent contractors are not entitled to tax withholding, Social Security and Medicare contributions, workers compensation, or the protection of various employment laws that prohibit discrimination, establish wage and hour requirements, and mandate time off.

Example: A graphic design company hires a freelance graphic designer to work on a project. The freelance graphic designer is an independent contractor and is not entitled to the same benefits as a traditional employee.

Explanation: The example illustrates how a hiring firm can employ independent contractors instead of traditional employees. The freelance graphic designer is not entitled to the same benefits as a traditional employee, such as tax withholding, Social Security and Medicare contributions, workers compensation, or the protection of various employment laws. This allows the hiring firm to save money on benefits and other employment-related expenses.