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Employee vs. Independent Contractor

December 13, 2011 By

Summary:  A common question is “Do I have an independent contractor or an employee?” Here are some questions to get you thinking in the right direction.

A question I am asked often is – I need help but I don’t know if I need a independent contractor or an employee?

It’s a difficult question and not one easily answered without digging into your business. I would like to give you some food for thought to get you thinking on the right path.

First, the reason you care is because if you treat someone as an independent contractor however the IRS or DOL sees them as an employee you will subjected to fines, penalties and back taxes. OUCH! Consider these questions before you decide.

Is the work project based? If you have a project or “to do” item that you can hand off and are only worried about the outcome and not how it’s done – get a contractor.

Does the person need to be in your office to complete the work at certain times? If you are telling someone when and where they will work – you need an employee.

Do you care when a person does the work? If you are only concerned with the work being done regardless if it is at 8am or 8pm as long as it is done by a certain date – get a contractor.

Is it ok if they have other clients? If they can work for you and others at the same time – get a contractor.

My favorite resource for this is by the IRS. This publication does a great job of getting you thinking in the right direction.

IRS Independent Contractor or Employee

What has been your experience with employee vs. independent contractor? Share below in comments.

 

Filed Under: Authentic Leadership, Legalities Tagged With: , , , ,

Does it really matter?

May 24, 2011 By

In a conversation last week I was asked “Does having good employees really made a difference?”  Instead of answering directly, I asked a few questions instead.  Follow along to see if you agree with me.

happy employees e1306207198399 320x117 Does it really matter?

I want you to think of your favorite local establishment…restaurant, store, coffee shop, etc.

Now think about what makes it your favorite.

Well since I can’t hear your answers I’m going to make an assumption – the people who work there.  It could be in the service they provide, knowledge of the products or how they have your order ready before your ask. All of these as a result of the people.

Now think of a place that has great products but poor service.

Which business do you think is more profitable? Of course, the first one. Why? Customers keep coming back, customers will tell other people, and there is more business.

Let’s ask the original question again.  ”Does having good employees make a difference?”

It doesn’t matter if your employees speak to customers or not.  All employees have customers – it it’s not the clients of the company, it’s the other employees.  All positions require information or product from other employees/departments to be successful. (you can read more here The Internal Customer).

Bottom line: Good employees treat your customers better which makes them want to return to your business and refer others.  This in turn increases your revenue.  Good employees make fewer mistakes, do their work right the first time and are more efficient/productive which decreases expenses. This results in an increase to your gross profits (EBITDA).

Who doesn’t want that?

Filed Under: Authentic Leadership, Employee Communication, Employee Satisfaction Tagged With: , , , , ,

Healthcare Reform 2010

March 23, 2010 By

It’s all over the news and possibly in the courts soon.  Healthcare Reform will be signed into law today.  What does this mean for small business and everyday people?  Here’s a quick summary of what is in the bill.  However there is a Compromise Plan that was passed by the House and needs to be debated in the Senate which can change what is in the current bill.

Here’s a breakdown of the current bill as it stands:

  • If you have less than 50 employees, you will NOT be required to provide healthcare coverage
  • If you have less than 25 employees and meet certain conditions, you may be eligible for a tax credit for providing coverage
  • There will be ban on lifetime limits on coverage
  • By 2014 states will be required to set up Small Business Health Option Programs (SHOP)  - this will allow small employers to pool together to get better rates
  • Dependant children can be coverage until the age of 26 (some states already have this)
  • If an individual couldn’t get coverage due to a pre-existing condition – they may be eligible for subsidized high-risk coverage
  • Starting in 2013 – families earning over $250,000 will pay an additional medicare tax of 3.8%
  • Medicaid to be offered to those earning up to 133% of the poverty level
  • In 2014 individuals may be fined (earning over certain income levels) for not having coverage
  • In 2018 – tax on so-called “Cadillac” plans
  • In 2020 – the “hole” in Medicare prescription coverage will be fixed
  • Children cannot be denied coverage for pre-existing conditions

There is still a lot of political maneuvering going on so these items may change.  Stay tuned for more details.

What are your thoughts – did it go far enough? Too far? Just right?

Filed Under: Benefits, Healthcare Tagged With: , , ,

Employee Surveys the good, the bad and the ugly

July 7, 2009 By

Want to know what your employees are thinking? Want to ask them in a way that they will feel free to share without repercussions?  Do a survey!

Here’s the thing about surveys – know what you are getting into before you start.  In other words only ask if you really want to know and will take action on the feedback.  I know for some of you that seems obvious, just understand the good, the bad and the ugly of employee surveys. 

The Good: if you ask the questions, really review the answers and take action (where you can) - you have won the loyalty of your employees.  They now feel you are truely interested in what they have to say. Summarize the findings and pass it along, they will provide you feedback any time you ask for it.

The Bad: you ask the questions, but not the tough ones.  You are asking questions to show on the surface you have an interest – they can see through you.  No more sharing, a decrease in morale.  Or worse they think “OK, he got his ego boosted – now what”.

The Ugly: you ask the tough questions, you don’t look at the results and you don’t follow up.  No more sharing – not now or even when walking out the door to a new job.  You have lowered morale to its lowest point and will not take any future surveys or questions seriously.

If you have been in the bad and ugly category – you can recover but over time.  Start doing it right and they will come around.

Filed Under: Employee Communication, Employee Satisfaction, Leadership Tagged With: , , , ,

Employee Satisfaction. Why does it matter?

April 17, 2009 By

Employee Satisfaction. Why does it matter?

When talking with small business owners the conversation will eventually turn to employee satisfaction and why its important.  Before getting into why it matters, lets review what it is and isn’t.

Employee satisfaction is NOT -

  • giving employees what they want
  • making them smile everyday
  • paying them a high salary
  • letting them do what they want
  • letting them take two hour lunches

So then, what IS it:

  • Listening to employee ideas & concerns
  • Treating them with respect
  • Setting up expectations
  • Follow through on expectations
  • Making sure they have the tools they need to do their work
  • Providing extra training where necessary

I realize this sounds simple and it theory it should be.  What makes it difficult? The priorities and fast pace of the day, basically we get caught up in what he have to do.

Well, I still haven’t answered the question – Why does it matter? Believe it or not the answer to the question is simple – PRODUCTIVITY.  Yes, it has been proven many times that satisfied employees are more productive employees. Doesn’t every business want that. Again – Yes.

So think about what you can do each day to improve employee satisfaction.  Have a great tip – share it here!

Filed Under: Employee Satisfaction Tagged With: , ,