Last week I mentioned that I had a plan for avoiding burn-out. The plan seemed simple; I was going to shift my time around somewhat, but the centerpiece was to hire a part-time admin to help take some work off my plate. Only one problem. Hiring someone is one of the most difficult things on the planet. Now I find myself looking for alternatives.
There’s been so much lip service paid by politicians to job creation that you would think my effort to create a part-time job would be welcomed. Instead, complex regulations have me curled up on the floor in the fetal position wondering if it’s even worth it. That’s a shame. No, that’s just insane. This shouldn’t be so hard, but it is.
The easy way to “hire” someone is to bring them on as an independent contractor. That works for a lot of jobs, but for an admin that would have set work hours, that’s probably not going to pass as legal. And I’m one of those law-abiding types of people, for better or worse. This is a job that seems to require hiring someone as an employee.
I had heard that it wasn’t the easiest thing to do, so I reached out to my grad school network and received a blizzard of responses from people on what to do. The responses made the situation even more overwhelming. There were things I hadn’t thought of. Do you offer benefits, vacation, sick leave, holidays…? The list goes on and on. The answer to most of those is “no” for a part-time job like mine, but those decisions were the easy ones.
More importantly, there are tax considerations. You don’t pay tax for independent contractors, but for employees there’s a payroll tax. (You know, it’s the Medicare and Social Security stuff.) Oh yeah, and you have to pay into unemployment as well.
I would also have to get workers compensation insurance, among other policies. Then I was told I would need to put together a comprehensive employee handbook and I’d have to make sure my offer letter was reviewed by a lawyer to make sure that I had structured it properly in case problems arose later on. Many people I spoke to mentioned how difficult it can be to actually fire someone once they’re hired, and that was a big frustration for those who were stuck with poor workers.
The dizzying volume of information told me I couldn’t go it alone. I had to get help, and there are a few options for doing just that. I’ll talk more about those next week.
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You write “That’s probably not going to pass as legal.” You might ask yourself, “says who?” Perhaps you could look at independent contractorship with an open mind.
Says the IRS. He would definitely have behavioral control over the employee (he would be telling the employee how to do the job, not just giving them a project and letting them complete it themselves), he would probably have financial control over the employee (they wouldn’t be in a position where they could bounce between employers at will, they’d be using his facilities and equipment, etc), and it would be at least a semi-permanent relationship. That definitely spells “employee” and not “contractor.”
Source: http://www.irs.gov/taxtopics/tc762.html
Wow! Virginia excludes many of those requirements for an employer with less than 5 employees. Sorry!
Hi Crank:
Have you thought of using a Temp agency
Cranky, I believe your statement about having to have an employee rather than an independent contractor is incorrect. At least in Massachusetts, Delaware, Maryland, and Virginia (the states I know), you could *certainly* hire sometime to work 40 hours a week and have them be an independent contractor. Happens ALL THE TIME. I don’t know if California laws are different, but I’d bet money that it’s possible, since I know several aerospace firms who hire temps/IC’s for months and even years at a time.
Anyway, best of luck, and hope this helps.
2nding Joe’s comment. Use a temp agency. You’ll pay more in the short term but you can evaluate them on a no-commitment basis and decide later on, when business grows, if it’s worth the headache to bring them on as a permanent employee.
This is indeed a tricky topic! Here’s a good 2 minute video to get you started on the basics.
http://bit.ly/fTvE9b
Thanks everyone for chiming in. I am looking at the temp agency route now because it just makes life easier. Sure you pay more, but then I won’t have to rip all my hair out, so that’s a nice bonus.
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Chiming in late on this, but I’m offering another option – a Virtual Assistant. I have a few small business clients who use a VA, who is paid as an independent contractor. This won’t work if the admin tasks you need to delegate include in-office phones, hardcopy managment and filing, but a good VA can also assist you to become a paperless/remote office. In my experience you get a better worker for about the same money as from a temp agency. Think about it!