Misclassifying Employees as Independent Contractors ... One of the Most Expensive Mistakes of Them All! Part 1

Written by Elena Fawkner

The time comes for every successful home-based business owner when one person can no longer do it all. Inrepparttar early days of your fledgling business you accepted that not only were you CEO, CFO, COO, secretary, treasurer and marketing director, you also had to be laborer, receptionist, janitor, chief cook and bottlewasher. That is simply what you have to do when starting out. In fact, I'll bet you worked harder in your "little home business" than you ever did in your former life as corporate whatever, right? But nowrepparttar 117962 time has come. You have successfully taken your business pastrepparttar 117963 initial, maddeningly slow, frustrating start-up phase torepparttar 117964 point where you're seeing some growth ... so much growth in fact that you're finding it near impossible to keep allrepparttar 117965 balls inrepparttar 117966 air.

The time has come to hire some help. OK, but what kind of help do you need? If it's a secretary/receptionist, that's easy. You go out and hire yourself a competent employee. But what if it's someone to carry out specific projects such as designing a website for a good customer you just can't service withinrepparttar 117967 timeframerepparttar 117968 customer needs? What if it's someone to create a marketing program to launch your business torepparttar 117969 masses? What if it's a bookkeeper to handle your accounts payable, receivable and everything else in between? The difference between these types of activities and our secretary/receptionist example is thatrepparttar 117970 former are all specific projects whereasrepparttar 117971 latter is not.

When considering whom to hire for your project work, you have a choice ... hire a full-time or part-time employee or hire an independent contractor. Byrepparttar 117972 time you include allrepparttar 117973 add-on costs of hiring an employee (in addition to wages or salary you need to add on federal and state payroll taxes, social security tax, federal unemployment insurance tax, state unemployment insurance, workers' comp premiums and employee benefits, not to mention shelling out for office space and equipment), hiring an employee becomes a relatively expensive option compared to hiring an independent contractor to dorepparttar 117974 same work. The add-on costs of hiring an employee usually add about 30-40% torepparttar 117975 bill. In other words, if you pay your employee $10 an hour, you'll really be paying $13 - $14 an hour once you include allrepparttar 117976 add-on expenses.

In contrast, although you usually pay an independent contractor more than an employee, that cost will still be less than an employee withrepparttar 117977 add-on expenses. You may pay an independent contractor $12 an hour without any additional charges. Sound good? Well, read on. It's not as easy as it looks.


So, what isrepparttar 117978 difference between an employee and an independent contractor anyway? Quite simply, an independent contractor is someone who contracts with someone else to provide specified services for a set price on terms and conditions outlined inrepparttar 117979 contract.

For example, let's say you hire a gardener to mow your lawn and get rid of weeds once a week. Your contract (whether written or not) is that Joe Gardener will arrive at your house on Friday morning, mow your lawn, get rid of weeds and generally tend to your garden. In exchange, you agree to pay Joe $40 for this service each week. Joe supplies his own lawnmower, hedge clippers and weeding tools. Joe decides what time he arrives and how longrepparttar 117980 job takes (within reasonable parameters). You do not supervise Joe in his tasks or dictate to him how they are to be done. Joe is an independent businessperson and you treat him accordingly. The final product is either to your satisfaction or it isn't. When he's finished, you pay him if you're satisfied withrepparttar 117981 end result and you don't pay him if you're not.

Contrast this with an employer/employee situation. Let's say you ownrepparttar 117982 business Joe's Gardening Service. You employ three employee gardeners to perform services for your business. Asrepparttar 117983 gardeners' employer, you pay them a fixed wage and you withhold taxes, unemployment insurance and various other benefits from their wages to remit torepparttar 117984 appropriate government agencies. In addition, you provide your employees withrepparttar 117985 tools and equipment they need to perform their work. You tell them what to do and supervise them while they're doing it. Atrepparttar 117986 end ofrepparttar 117987 job they get paid by you whether your customer is satisfied withrepparttar 117988 job or not. In other words, although your customer may not pay you (the independent contractor) because she is dissatisfied withrepparttar 117989 work performed by your employees, you must still pay your employees because they are not independent contractors - they are your employees and are entitled to be paid a fixed wage. If you are dissatisfied with their work, you can fire them but you can't decide whether to pay or withhold their wages based onrepparttar 117990 end result ofrepparttar 117991 particular project.

Am I Normal?

Written by Jackie Ulmer

It's 3:00AM and instead of sleeping, I'm trying to figure out how to get listed nearrepparttar top ofrepparttar 117961 search engines. Am I normal?

Am I normal? I pondered that question this morning while I quickly checked email one last time before shufflingrepparttar 117962 kids inrepparttar 117963 car and off to school.

Am I normal? It crossed my mind again while racing back toward my home office as I watched a group of moms head torepparttar 117964 bagel shop for coffee and a chat.

Am I normal? This afternoon, as my neighbors talked intensely aboutrepparttar 117965 latest episode of ER, my mind kept wandering back to my web site, and I wondered if that was normal.

My mother tells me I should quit thinking about business so much and just enjoy my children, which I do, but I still wonder, am I normal?

Am I normal? My friends look at me as if they've seen an alien when I tell them that I'm never going back to my corporate marketing career. I'm building an Internet empire from my home, would they like one too?

Now, don't get me wrong. I love life and live it torepparttar 117966 fullest, with lots of playtime. But, ambition andrepparttar 117967 challenge of "buildingrepparttar 117968 perfect beast" push me relentlessly sometimes. I figure you can relate if you are reading this article. You are looking to create something bigger than yourself, too!

But, it's a crazy world we live in. A world where people have learned to stifle their dreams, their desires, their creativity. We are taught to "settle" for what we are dealt in life. All too often, when we try to move beyond that, those closest to us try to hold us back, save us from ourselves.

"Consider yourself lucky for what you have."

"It's a good job andrepparttar 117969 benefits are great."

"The average American family has thousands of dollars in credit card debt."

"It's too risky."

I don't know how you feel, but I want to LIVE my dreams, have my heart's desires and allow my creativity to blossom. I want to be my own boss, work in my PJ's if I choose, take a four hour lunch to go shopping and fire myself when I'm not measuring up. (Of course, I'm eligible for rehire tomorrow!)

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