Efficiency is an ever-rising need for organizations, and firms constantly seek ways of minimizing overhead while maintaining competitiveness. Compared to employees, independent contractors contribute more towards efficiency. First, the hiring of independent contractors reduces overhead costs related to benefits, payrolls, and other employee expenses. David (2009) argued that this enables even a new venture to raise enough revenue for involved costs. Moreover, no health benefits are needed for independent contractors. This relieves small businesses of such uncontrollable costs. There is also flexibility when operating with independent contractors because their work is based on demand, meaning that when the project ends, they also leave. A company can, thus, make maximum use of rising opportunities and control costs significantly. Again, unlike employees, independent contractors are often fully trained and possess greater skillset. Based on all these benefits, therefore, a person may think that employers would choose independent contractors over employees.

Carlson (2017) stated that although self-employed workers such as independent contractors are left out in the definition of an “employee,” denial of these groups being employees is questionable. As it is, a self-employed worker is a client’s employee for as long as their contract or service lasts. Similarly, suppose a firm assigns a group of its employees to take care of client demands at a particular time. In that case, an employment relationship is developed between the workers and the client (Carlson, 2017). Therefore, there are times when independent contractors clearly appear to be employees. In the Tillis v. Global Fixture Services, Inc., et al. case of March 21, 2019, for example, Tillis sued Dolgencorp of Texas and Global Fixture Services for not complying with the Fair Labour Standards Act. The plaintiffs or “crew members” sought to recover their overtime compensation which had not been paid because the companies considered plaintiffs independent contractors and not employees. There is also Sheldon v. State Farm Fire & Casualty Co. case, where 2 insurance agents sued State Farm entities within Illinois for not offering retirement, pension, and 401(k) to independent contractors. State Farm explained that the payments were only available for full-time employees.