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Businesses are having much more of their work done by independent contractors - those not considered employees and don’t receive any benefits - reports SurePayroll, an online payroll service.

Michael Alter of SurePayroll attributes this increase to more unemployed workers taking independent contractor work to pay the bills because they can’t find jobs in this recession.

“It’s a way to make ends meet without a full-time job,” he said. “Moreover, it has become a de facto way of doing business in the small-business economy.”

Under this arrangement,  contractors, not the company, are responsible for payroll taxes. They also don’t receive fringe benefits.

“It’s our estimate that 75% of the new independent contractors are ‘reluctant entrepreneurs,’” Alter said. “In other words, they are working as independent contractors out of necessity because no full-time positions are available. Once the economy completes its rebound, the vast majority of these entrepreneurial contractors will revert back to full-time positions.”

Nationwide, small-business staffs rose 1.2% in April. However, wages dropped 2.7%.

“There’s no relief in sight for small-business salaries,” Alter said. “Salaries are now at August 2006 levels.”

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