Tuesday ToolBox for Small business hosted by Sue Lundquist. Sponsored Series brought to you by The STRENUA Group: Employee vs. Contractor vs. Outsourcing:

Amanda’s Bio:
Amanda’s 15 years of progressive experience in human resources helped fine-tune her strong relationship skills and reliable expertise in employee relations, workforce analysis and planning, safety and risk management, compensation and benefits and employment/labor laws.
With a background in business management, Amanda brings a real-world market-perspective to the HR field.
amayo@strenuagroup.com

Strenua Group’s Summary:
Strenua Group provides comprehensive HR, IT, Accounting, Marketing and PR, Multimedia Design, Business Development and Administrative services. As your strategic business resource, Strenua Group helps you save time and money. They take care of the logistical headaches, and let business owners and entrepreneurs take care of growing their business.
Shift your company’s emphasis from catching up to taking off, with their personalized, full-service business solutions based on trust, professionalism, and relationships.
www.strenuagroup.com

President Amanda Mayo will be discussing

Employee vs. Contractor vs. Outsourcing: What’s important to know & what’s best for YOUR business
Our team gets questions every single week wanting clarification on defining Employee vs. Independent Contractors: what is a 1099 and why should I care, does it matter if I make them an employee vs. a contract worker? And most importantly, what is the liability to me as the business owner if I do it wrong?
Definition of an Employee: An individual who works for a company on a regular basis in exchange for compensation. This work is controlled and directed by the employer.
Definition of an Independent Contractor: an independent contractor does not work regularly for an employer but works as and when required. The Contractor has independence of work and is not controlled by the employer. They KEY being, independence of work.
Now, what is a 1099? Simply put, any business entity that pays more than $600 to an Independent Contractor in one year is required to report this to the IRS. This form reports monies paid – Independent Contractors do not have income taxes withheld from their pay as regular employees do.
Independent Contractors are more typically service consultants for project or retainer work.
Risk to business: Failure to properly classify and treat a worker as an Employee or Independent Contractor, especially over time can be very costly to the business owner = fines, penalties and interest. This can absolutely break a small business!
Compliance and documentation: Simply put, always document, document, document! When hiring an employee, draft a simple and compliant offer letter with an accompanied job description. When hiring an Independent Contractor, ensure the specs of the job are outlined in the contract. There really doesn’t need to be any other special documentation or forms. If anyone tells you the opposite, don’t hire them for your business, they are trying to sell you unnecessary services. The small business owner doesn’t have to have the compliance and documentation practices of a large corporation and public company. Find a business partner that truly understands small business and will do what is legal while balancing what is operationally realistic for you.
Bottom line for Independent Contractors – It is the business owners’ responsibility to know all of this and mitigate risk of misclassification of what your workforce is comprised of. I highly recommend you 1) research on your own with the IRS (which I know can seem very intimidating), 2) consult an attorney that specializes in employment law or 3) partner with an experienced HR consultant.
((please check out Strenua Group on Facebook and Twitter – after this show we are posting links and resources for you on this complex topic ~ the IRS provides a wealth of information and questionnaires that will help))
Outsourcing: So………..on finding a business partner that understands small business, I’d like to touch on Outsourcing. Every week I meet with business owners that give me horror stories of consultants that tell business owners what they have to do. I guess I only bring this up because I think this is just awful and has made me more and more angry with each story! In searching for anyone that does work for you and your business, ensure – no, INSIST that they truly partner with you. Anytime anyone tells you that you have to do something a certain way and doesn’t offer other suggestions – run! Find someone else! Especially when it comes to anything related to the workforce. A competent consultant with common sense will think outside the box. All small businesses have their own story and have unique needs. That consultant will consider the needs of the business, the owners, the culture, the desired results and finding the best solution and plan that will also be compliant and mitigate risk.
Bottom line for Outsourcing work – Always, always, always find a business partner that specializes in what you are looking for. You need to feel a connection with them and you need to interview them! Make sure they are going to truly collaborate with you and that they understand your business and your needs.

(REMINDER: please check out Strenua Group on Facebook and Twitter – after this show we are posting links and resources for you on this complex topic ~ the IRS provides a wealth of information and questionnaires that should help)