Employee vs Independent Contractor

Hello Handyman,

 

While running our businesses we come across many decisions that could make or break our business. One of those decisions we have to make is do we hire help or do we stay a one man operation. Then if we decide to expand and hire help the biggest decision can be are they an employee or an independent contractor. You have to make that decision for yourself based on your needs and how you want to use them. My opinion as a Handyman is to keep it simple. The IRS dictates what the difference is so as long as you are working within the guidelines then you are safe to have an independent contractor working for you without the responsibilities of an employee.  First thing and the biggest thing you avoid are the payroll taxes that can be smothering. Since they aren’t typically going to be working in your office but out in the field for your customers it will be very easy to let them decide when, where and how they work which are some of the classification requirements. So for example I have a scheduling system set up that each guy controls his schedule and customers can log online and request and schedule who they want. They decide how much or how little they work. How do you get paid? The customer pays you and you pay them. So if you are charging $60 per hour and paying your independent contractors $30 per hour then there is your profit.   You can require them to carry their own insurance and maybe pay them an incentive so that you don’t have to insure them. Remember to have them list you as additionally insured though. Why don’t they just go out on their own? Some people just don’t have what it takes or the desire to deal with the customers and the business side of it. Some will try though. If you are advertising and giving them work most guys will be happy just working. On the other hand you may decide to bring in full-fledged employees or stay solo. Look at your options and make an educated decision either way, Solo is obviously the easy way to go but you will make less money for sure and without help you won’t be building a business that can work without you. You will work longer and when you are forced to retire I hope you had invested into that time for yourself.  I started my business at 16 yrs. old and from day one I said I was building my future, a business that will pay me later and the only way that happens is if the business doesn’t rely on me to survive. Make sure you have Insurance and listen to your customers. They will know who you should keep before you do. Always background screen them either as part of your UHA certification or on your own.

As always I wish you luck and happy home repairs

Flash Shelton H.D.

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