Avoid These Missteps in Hiring Freelancers
You are ready to take your business to another level, but hiring full time staff just doesn't cut it with you.
You are not willing to take on the complications of handling salaries, taxes, and other employee issues.
Luckily, there is a method of increasing your company's capacity without these problems ' work with independent contractors.
There is however a thin line between permanent staff and freelancers.
These tips will help you avoid sticky situations: - Make sure your personnel are not employees in contractor clothing.
The IRS carefully scrutinizes the use of independent freelancers, partly because companies have used them as a subterfuge to avoid paying employment taxes (You can bet the IRS wants you to pay as much in taxes as possible).
The IRS will look to the degree of control you have over the worker.
Do you dictate how, when and where the work will be done and by whom, using what method? If so, the worker is more likely to be considered an employee.
For example, if you hire "Jemma" as an independent contractor to come to your office and answer your telephones with your company name from 9 a.
m.
to 5 p.
m.
, the IRS is likely to consider Jemma an employee, even if you have a written agreement calling her an independent contractor.
- Ask your freelancers to supply business certificates.
Outsourcing to a business entity minimizes the confusion between an independent contractor and an employee.
You don't have to work only with colossal companies.
Instead, there are many small single-owner businesses that will more than meet your requirements.
By working with a company, you are far less likely to be caught in the "employee net"; a simple guideline is that you don't supply a 1099 form to a corporation or an LLC.
- Check that they have insurance.
An independent contractor with insurance coverage points to a serious commitment to the business and clients, and forethought to protect the assets.
You know you are on firm ground when you deal with such freelancers.
Thus, when you launch a filesuit against them, you know that they have the financial ability to pay any damages you may be awarded.
Getting a judgment in your favor doesn't mean much if they have no money in the bank.
Freelancers, when managed well, are a great asset to your business.
Have an agreement in writing, just as you would with any other vendor offering significant services.
Get an attorney to review your agreements before finalizing them, as a slight change in wording can be all the difference between getting caught and being well buffered.
When your agreements are in order, you have peace of mind when you work with a "gun for hire.
" Copyright (c) 2010 Ask The Business Lawyer
You are not willing to take on the complications of handling salaries, taxes, and other employee issues.
Luckily, there is a method of increasing your company's capacity without these problems ' work with independent contractors.
There is however a thin line between permanent staff and freelancers.
These tips will help you avoid sticky situations: - Make sure your personnel are not employees in contractor clothing.
The IRS carefully scrutinizes the use of independent freelancers, partly because companies have used them as a subterfuge to avoid paying employment taxes (You can bet the IRS wants you to pay as much in taxes as possible).
The IRS will look to the degree of control you have over the worker.
Do you dictate how, when and where the work will be done and by whom, using what method? If so, the worker is more likely to be considered an employee.
For example, if you hire "Jemma" as an independent contractor to come to your office and answer your telephones with your company name from 9 a.
m.
to 5 p.
m.
, the IRS is likely to consider Jemma an employee, even if you have a written agreement calling her an independent contractor.
- Ask your freelancers to supply business certificates.
Outsourcing to a business entity minimizes the confusion between an independent contractor and an employee.
You don't have to work only with colossal companies.
Instead, there are many small single-owner businesses that will more than meet your requirements.
By working with a company, you are far less likely to be caught in the "employee net"; a simple guideline is that you don't supply a 1099 form to a corporation or an LLC.
- Check that they have insurance.
An independent contractor with insurance coverage points to a serious commitment to the business and clients, and forethought to protect the assets.
You know you are on firm ground when you deal with such freelancers.
Thus, when you launch a filesuit against them, you know that they have the financial ability to pay any damages you may be awarded.
Getting a judgment in your favor doesn't mean much if they have no money in the bank.
Freelancers, when managed well, are a great asset to your business.
Have an agreement in writing, just as you would with any other vendor offering significant services.
Get an attorney to review your agreements before finalizing them, as a slight change in wording can be all the difference between getting caught and being well buffered.
When your agreements are in order, you have peace of mind when you work with a "gun for hire.
" Copyright (c) 2010 Ask The Business Lawyer
