Consultant or employee – differences and consequences, June 2013
Hiring consultants can be an attractive alternative to hiring employees for various reasons. In particular, it may be attractive to small or new and/or foreign companies that want to enter the Swedish market but are not yet ready to take on the responsibilities of an employer. Consultants may also be needed during work peaks, when a company needs a specific task done or specialist competence within a certain area. Many consultancy agreements are, however, legally to be regarded as employment agreements, which may lead to unexpected consequences in relation to employment and tax law. In this article we illustrate these issues (mainly from an employment law perspective) and explain how to minimise the risk that a consultancy agreement is deemed to be an employment agreement.