@dereklapp: Everything you said is true, but I was talking benefits of hiring freelancers [and firms] vs. employees of their own company. So:

- No need to provide healthcare benefits * no, so we just charge more to make up for it.

You're right we charge extra to make up for this,
but it may not be the same amount that they would pay to an employee.

- No need to pay tax contributions * no, so we just charge more to make up for it.

I meant payroll taxes (eg. in the US: federal income tax, state income tax, social security, and medicare),
but on second thought, you're right, we should be charging extra to make up for this.

- Spend less on gas; spend more on other areas of economy * false. i'm driving for business. now it's a business expense. now i have to charge more.

I'm not and that's just a slight difference between the way we do business. I do business internationally and collaboration happens online.

If you are in the United States, 100% of that business expense is deductible. You can even deduct the expense of the vehicle from your income if you use it primarily for business. So even then I would not have to charge the client for this.

- Less time lost commuting in traffic; more time to work * false.

Absolutely true. See above.

- Communicate instantly via IM, Email, Text Message, etc. * you can do that at work, but who relies on that as credibility? they can be forged so easily.

Not for credibility, but convenience.

- Communications can be saved for later reference * that's why we have meetings and signoffs that state what's discussed.

Not for accountability, but convenience. Especially when designing, it is helpful to be able to go back and re-read exactly how the client described what he wants you to do, exactly what day he said he put the check in the mail, for how much, and when I can expect it to arrive, etc. It streamlines communication.

- Pay only when work is needed (eg. flat-rate or temporary hourly vs. salary employee) * payment is the same from the client's end. the company pays me a salary not the client.

If the company were paying me as a freelancer, they would only have to pay as work is needed.

- No need to worry about firing, paying unemployment, or COBRA after the work is complete * ??

Some employers think they have all this work and so they hire an employee. If the employee is a good programmer, they usually design software that can be managed/maintained by non-programmers. The nature of the business is short-term. Oftentimes, our programs even replace other people by automating their jobs, too. Then the employer (assuming they have a conscience) has to worry about letting go this guy who has a family to feed and possibly paying out unemployment until he gets another job.

Consolidated Omnibus Budget Reconciliation Act (COBRA) is part of a bill that the United States Congress passed regarding health benefit provisions in 1986. The law amends the Employee Retirement Income Security Act, the Internal Revenue Code and the Public Health Service Act to provide continuation of group health coverage that otherwise might be terminated.

In other words, they are obligated by law to continue providing health insurance and collecting payment from the ex-employee until they get a new job.

- I can work nights and weekends if I want and you don't pay overtime * now people expect everyone to be on call 24/7. this hurts people.

I didn't say I would be available nights and weekends. I just said I could work it, if I wanted to.
On second thought, that's really none of their business and I probably won't.

- More productive, happy, and possibly long-term working relationship * how so vs a firm? someone who specializes in HR is going to do a much better job at estabishing and maintaining a relationship than someone who's trying to do everything themselves.

This list was vs. employees. In the case of a firm, you are correct.

- Leverage; I reserve the right to sub-contract other highly-specialized and talented freelancers to help get the job done quickly if necessary * so do firms. it's called outsourcing.

This list was vs. employees. In the case of a firm, you are correct.

- Save on equipment costs * false.

True! An employer would have to purchase the employee's equipment (eg. software licenses, computer, monitor, keyboard, mouse, or notebook, and various upgrades such as RAM memory) and keep it up-to-date,
but not a freelancer (or even a firm, right?)