Independent contractors may be responsible for their own withholding taxes. SS-8 with the IRS and request an advance determination of whether a worker will be considered an employee or an independent contractor. The IRS has also set up what it calls "The 20 Factor Test" to provide guidance. A telecommuting employee might be considered an independent contractor under certain circumstances. Outsourcing tasks may mean greater flexibility in staffing as well as reduce the cost of employee benefits, motivated workforce, thanks to the flexibility of telecommuting, but may also mean higher turnover and training costs. The benefits of having a happy, may well offset the expenses involved in setting up and administering the program.
