Misclassifying Employees as Independent Contractors ... One of the Most Expensive Mistakes of Them All! Part 2

Written by Elena Fawkner


DETERMINING WHETHER JOE IS EMPLOYEE OR INDEPENDENT CONTRACTOR

Unfortunately, as far asrepparttar various government agencies are concerned, there is not one single test that determines whether Joe is your employee or an independent contractor. Even more difficult, it is quite possible that forrepparttar 117951 purposes of one government agency Joe is considered to be an independent contractor while for another he is treated as an employee.

=> The IRS/Common Law "Control" Test

The IRS followsrepparttar 117952 common law "control" test for determining whether someone is an employee or independent contractor. This test looks at 20 factors as being indicative (and only indicative) of whetherrepparttar 117953 person is an employee or independent contractor. The test basically involves a balancing of these factors -- which way doesrepparttar 117954 scale tip?

Here arerepparttar 117955 IRS factors:

1. Whetherrepparttar 117956 worker can earn a profit or suffer a loss fromrepparttar 117957 activity (if so,repparttar 117958 more likely it is thatrepparttar 117959 worker is an independent contractor). 2. Whetherrepparttar 117960 worker is told where to work (indicative of employee status). 3. Whetherrepparttar 117961 worker offers his or her services torepparttar 117962 general public (indicative of independent contractor status). 4. Whetherrepparttar 117963 worker can be fired byrepparttar 117964 hiring firm. 5. Whetherrepparttar 117965 worker furnishesrepparttar 117966 tools and materials needed to dorepparttar 117967 work (indicative of independent contractor status). 6. Whetherrepparttar 117968 worker is paid byrepparttar 117969 job or byrepparttar 117970 hour (independent contractors are more likely to be paid byrepparttar 117971 job; employees byrepparttar 117972 hour). 7. Whetherrepparttar 117973 worker works for more than one firm at a time (indicative of independent contractor status). 8. Whetherrepparttar 117974 worker has a continuing relationship withrepparttar 117975 hiring firm (indicative of employee status). 9. Whetherrepparttar 117976 worker invests in equipment and facilities (indicative of independent contractor status). 10. Whetherrepparttar 117977 worker pays his or her own business and traveling expenses (indicative of independent contractor status). 11. Whetherrepparttar 117978 worker hasrepparttar 117979 right to quit without incurring liability (indicative of employee status). 12. Whetherrepparttar 117980 worker receives instructions fromrepparttar 117981 hiring firm (indicative of employee status). 13. Whetherrepparttar 117982 worker is told how to performrepparttar 117983 work (indicative of employee status). 14. Whetherrepparttar 117984 worker receives training fromrepparttar 117985 hiring firm (indicative of employee status). 15. Whetherrepparttar 117986 worker performsrepparttar 117987 services personally. 16. Whetherrepparttar 117988 worker hires and pays assistants (indicative of independent contractor status). 17. Whetherrepparttar 117989 worker sets his or her own working hours (indicative of independent contractor status). 18. Whetherrepparttar 117990 worker provides regular progress reports torepparttar 117991 hiring firm. 19. Whetherrepparttar 117992 worker works full-time forrepparttar 117993 hiring firm (indicative of employee status). 20. Whetherrepparttar 117994 worker provides services that are an integral part ofrepparttar 117995 hiring firm's day-to-day operations (indicative of employee status).

It is important to note that none ofrepparttar 117996 above factors are, of themselves, determinative. The IRS will balance all ofrepparttar 117997 factors to determine which side ofrepparttar 117998 equation is favored.

=> Other Agencies

The other government agencies with which you need to be concerned are:

1. Your state Unemployment Compensation Board. 2. Your state Workers' Compensation Insurance Agency. 3. Your state Tax Department. 4. Your state/federal Department of Labor.

Unfortunately each state agency varies in its approach to determining whether a worker is an employee or independent contractor. Many states' agencies use a statutory test focusing on just a few ofrepparttar 117999 "control" test factors. You should therefore find outrepparttar 118000 factors that your state's agencies take into account before hiring any independent contractors. Most of this information will be available onrepparttar 118001 agency's website. If not, call them and get them to send you information about their policies.

Into Every Life a Little Rain Must Fall - Part 2

Written by Elena Fawkner


=> Expanding Your Network

Now think about what you need to do to expand your network. Think about where you should go, what networking groups you should consider joining and how much time you have available to invest in networking. Ask people from your existing network where they go and what they do and start there. Also think about groups such as alumni clubs, industry associations and social clubs and well as your personal hobbies and interests.

Attend networking functions organized by these groups and when you're there, workrepparttar room. Enjoy yourself, shake hands firmly and smile. Show up early and leave late. If you go with a friend or colleague, split up. Play your 15 second commercial over and over again. Have a 45 second version ready too for those who are interested in learning more about your business. Spend two thirds of your time with people you don't know. Don't try and sell your services, focus on building rapport withrepparttar 117950 people you meet. Collect business cards and make notes onrepparttar 117951 back of them to jog your memory later when it comes to making further contact withrepparttar 117952 people you meet. Show genuine interest and get people to talk about themselves.

If you get anxious when meeting new people, arm yourself with a checklist of conversation starters such as industry challenges, trends impacting your business, and questions such as "What brings you to this event?" or "Tell me aboutrepparttar 117953 customers you like to do business with". Endrepparttar 117954 conversation with "If there's ever anything I can do, please call" and exchange business cards.

TENDING YOUR GARDEN

As noted earlier, this isrepparttar 117955 part where most people drop out ofrepparttar 117956 race. Therefore, it'srepparttar 117957 part where you can gain your greatest competitive advantage.

Failure to continuously follow through with people they meet isrepparttar 117958 number one reason most people never reach their full rainmaking potential. Many people attend functions, meet new people, collect business cards, file them in a Rolodex and wonder why nothing ever happens.

In order to succeed in your business, you must not only have a precise understanding of exactly what it is you are selling and to whom, you must also make a commitment to sell it over and over and over again, often torepparttar 117959 same person! The average person has to hear a message seven times before they will remember it. Most sales are made afterrepparttar 117960 fifth contact and only ten percent of people haverepparttar 117961 staying power to makerepparttar 117962 fifth call. That means that out of a group of 100 competitors, you're only competing against ten of them. The difference between you andrepparttar 117963 other ten will come down torepparttar 117964 effectiveness of your system for maintaining contact with people who can refer you business.

Here's how to tend your garden:

=> Follow Uprepparttar 117965 Initial Meeting

Following your networking activities, you will have in hand a stack of business cards from people you have met. What do you do with them other than filing them in your Rolodex? Write a short note to each person you met that you would like to develop a relationship with. This note should be handwritten, and go something like this:

Cont'd on page 2 ==>
 
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