Freelancer Management

Clients tell us they grapple with worker classification over and over. They wonder whether workers should be treated as W-2 employees or as 1099 independent contractors. It can be a complicated subject and every time the game changes, the rules change, too. Fortunately, with brand ambassadors, it can quickly become simple. The answer comes down to the way you answer one question. 

How Does The IRS Distinguish Between an Independent Contractor And an Employee?

One of the most foundational questions the IRS considers is how much control the employer has over a worker’s schedule, payment, and other aspects of their job. The greater control the employer has, the more likely the worker will be considered an employee. For example, workers will be considered employees when most of the following statements apply: 

*Clients set expectations for work hours
*Workers perform services and expectations in a certain order (as directed by the client)
*Workers submit reports
*Workers perform their duties onsite at a specific location and for a set event
*Workers are paid hourly rather than on a project basis

Independent contractors, on the other hand, are autonomous workers and are not required to set a schedule (i.e.: show up at a specific time for a specific event) or perform tasks in a certain order. They are also often paid on a project basis rather than hourly. 

Where do Brand Ambassadors Land And Why Do Companies Care?

The above description for an employee usually applies to brand ambassadors. Their work simply does not look like the complete autonomy the IRS requires to consider a worker a true 1099 independent contractor.

If the answer really is this simple, why do companies want to justify a different decision? One of the most consistent arguments for attempting to classify any worker as a 1099, regardless how thin the justification, is that it’s cheaper. And it is! At least up front. But if there’s one thing we’ve learned, it’s that the IRS is paying attention. Should you ever get caught misclassifying a worker, you’ll find out it’s not so cheap after all. Aside from the money you risk sinking into paying criminal and civil penalties, you also risk losing credibility along with energy and valuable human resources spent dealing with the issue.

It’s stressful. It’s costly. It’s just not worth it.

The Bottom Line

In most cases, we’d absolutely recommend calling a brand ambassador a W-2 employee. If you need advice on your specific situation, our team knows this stuff inside and out. 

If one or more of the following statements is true for you when it comes to onboarding freelancers, it might be time to reconsider your methods:

1. We spent more time onboarding freelancers in 2021 than we did in 2020
2. Our team has a basic understanding of the terms exempt, non-exempt, W-2, and 1099 but can’t define them in our sleep  
3. The above terms give me a headache
4. We have workers in multiple states

The Challenges With Onboarding  

One of the hardest (and most important) things about setting up your workforce is classifying workers correctly. That’s why we cover worker classification extensively here on our blog. On a day to day basis, it’s important to know who’s a strong worker, who might need a little bit of help, and who has potential to grow into other roles. On the front end, accurate worker classification is crucial to preventing issues later. With the Department of Labor’s ever-increasing focus on worker classification errors, it’s incredibly important to get it right up front. 

Another incredibly important aspect of bringing on new workers is making sure you’re paying them accurately and in a timely manner. This includes payroll taxes. Since each state has strict pay deadlines for specific types of employees it’s important (and hard!) to stay on top of the ever-changing wage laws at the federal, state, and local levels. Along with differing wage laws, some states and localities require a different taxation method than the federal government does. 

Enter PayReel

If offloading some of your onboarding paperwork would free up your time and energy for the creative parts of your projects, it might be time to consider bringing on a partner. PayReel is equipped to manage events, employees, and all the associated paperwork. Our team stays well versed in local, state, and ever-changing federal tax methods and laws to make sure employees are happy, clients are covered, and the IRS is bored. 

Here’s where we stress (and the only time we stress), we got it.

Whether it’s a massive event or a one-camera shoot, when PayReel manages your projects, it’s the best for clients and workers alike. We’re devoted to making every single client and worker interaction a good one, which makes working with you mighty attractive for workers.

Make your life easy and your workers happy

1. Make events of any size a breeze

Whether you’re payrolling thousands of workers, sending a crew to an NBA game, or something in between it’s nice to know all the details are handled. 

2.  Humans when you want them. Automation when you don’t.

Things don’t operate on a nine-to-five schedule and neither do we. We have an after-hours phone so we can be sure to provide speedy answers. And our online system allows you to take care of just about anything…at any hour…with a few taps or clicks. 

3. No trees were harmed in the making of this paperwork 

Not having to sift through piles of identical paperwork cluttering up your desk and your headspace makes the process quicker and easier for you and for your workers. Paperwork without the paper? Yes, please! 

4. Speedy payment

Workers submit timecards on Mondays and we pay them on Fridays. When they’re paid quickly, they don’t need to call your office, which frees you up to do your job better. Of course, it also keeps workers happy so they are free to focus on your project and happy to come back for your next event.

5. Happy workers

Speaking of keeping workers happy, the last thing you need once you’ve hired people is to lose their loyalty on the back-end details. Whether they’re working for one day or for a month, we make sure workers get paid quickly and accurately so if you want to hire them again, they’ll be ready to pick up the call.

As Michael, one of the freelancers PayReel pays, said, “[My Customer Experience Manager] has been superb in addressing whatever problems I have had.”

6. Event payroll as easy as 1, 2, 3, w-4

By managing all the payment details, including the mountains of W-4s, payroll becomes a non-event.

The bottom line

You work with us because we make your life easier. Why not use us for all your events and workers? Not only does our team manage event payroll and payroll taxes; as the employer of record, we even take on all risk associated with a variable workforce. Think you might benefit from hiring a payroll service? Here’s a handy guide to find out more. Or contact us at 303-526-4900.

Employer of record (noun):

a) a company or organization that is legally responsible for paying employees, including dealing with employee taxes, benefits, insurance, etc.

b) your secret weapon for eliminating red tape for hiring and keeping you out of court

While you’re not going to find that second definition in the dictionary, it’s certainly one of the top benefits of partnering with an Employer of Record (EOR). Let’s take a look at the reasons some companies outsource this important part of their business.

What are some of the top benefits of having an EOR?

An EOR serves as the employer and takes on all related responsibilities and liabilities while employees work for another company. An EOR does some or all of the following:

• Makes hiring new workers enormously easier and faster
• Covers payroll management for freelancers
• Maintains current headcount
• Guarantees on-time payment
• Handles all compliance issues
• Provides workers’ comp and all necessary insurance for contractors
• Conducts background checks and drug screenings
• Turns a mountain of hiring paperwork (certificates of insurance, I-9s, E-verify forms, and so on) into a mole hill
• Terminates employees, administers benefits, and handles some worker issues

Who needs an EOR?

We find that clients with a lot of freelance hiring needs on tight deadlines benefit greatly from partnering with an EOR because it makes onboarding–often one of the most painful parts of the process–a nonissue. They also love that outsourcing many of these services helps eliminate or at least reduce the need for an internal HR department. Since we specialize in these services, we have systems in place to make everything as efficient and smooth as possible. Sometimes, it’s the difference between staffing and finishing projects on time and tanking a project before it really even gets off the ground.

Bottom line

Not every company needs an EOR, but for those who do, it’s a game changer. If you think your might be in the latter category, reach out to us and we’ll talk through solutions for your unique situation. Your life is about to get a whole lot easier.

Pixar’s cereal bar is the stuff of legend. The famous first stop for anyone who tours the studio isn’t what the company culture is built on, but it is a noteworthy expression of a company culture that cultivates creative expression, communication, and a feeling of purpose among workers.

You don’t need a cereal bar, but that feeling? That’s worth emulating. After all, the experience your workers have working with and for your company affects not just their quality of lives but your business overall, too.

Don’t misunderstand: A positive company culture is more than ping pong in the break room, nap pods, or free bagels day. In fact, you don’t need a break room, or even a workplace at all, to have a company culture.

You already work hard to foster the culture within your physical space. Here’s how you can maintain that company culture with a remote workforce.

Integrate culture into interviews and on-boarding

One way to maintain and strengthen your company’s culture when working with a variable, contract, or remote workforce is to start from day one. Provide a culture orientation that introduces new team members to the culture. Whatever form the message takes it should do the following:

Explain what your culture is
Define your mission statement and core values
Give examples of the culture in action

Share this information with new team members as part of the on-boarding process. Make it available for all employees to reference. Train your hiring managers and staffing or crewing agency to make sure potential workers are a good fit for both the role and the culture. You could also create a peer mentoring program where teammates on-board each other and train new members on the brand.

By integrating your culture from the very first touchpoint, you can set it up for success — no matter how many miles separate teammates.

Foster communication

In co-located offices, important information often gets exchanged in break rooms, hallways, impromptu meetings, and at after-work drinks. With a remote team, you have to go out of your way to overcome the “watercooler gap.” Create digital opportunities for teammates to connect and collaborate.

Tools such as video conferencing, instant messaging, and online collaboration methods like Zoom, Slack, and Google Hangouts can help shrink the miles. Detailed meeting notes and recorded discussions can help make sure the right people are in the loop, even if they’re in different time zones.

Use tools that reflect and support your culture

Just like connections, the personality and culture of co-located offices develop through the interactions they’re home to. It evolves through the proverbial watercooler talks, whiteboard sessions, inside jokes, and shared experiences. Your remote team (or team of short-term contractors) can develop something similar through the tools you use every day.

As Nick Francis said, “A culture’s effectiveness revolves around how information flows.” That means you need to adopt tools and processes that will foster communication and that will also serve as an extension and vehicle of the culture.

Engage workers

Another way you can help maintain company culture across your remote workforce is by creating opportunities for social interaction and employee engagement. While a weekly happy hour wouldn’t be realistic, something like a virtual book club could be. Or if you’re aiming to build camaraderie or foster teamwork, you could host a monthly game night where workers team up for an online video game tournament.

It doesn’t have to be all fun and games. You could host monthly lunch-and-learns over Zoom or Google Hangouts, or you could create a Slack channel where workers can recognize and give each other kudos. You might also consider implementing weekly video updates where you share company-wide news, birthday announcements, or whatever’s culturally relevant to your organization. There are countless ways you can engage remote workers. Find what works for your team and make it a habit.

The bottom line

It’s worth investing your remote workforce’s culture. Companies with strong cultures tend to see higher rates of productivity, be more profitable, and retain top talent. Thankfully, you don’t need a headquarters to reap the benefits of positive company culture.

Learn how partnering with PayReel to manage your contingent workforce can free up your resources to focus on strengthening your culture and bottom line.

ABOUT PAYREEL:

At PayReel, we minimize the time and effort it takes to get you ready for your project. Rely on PayReel to assume all of the risk associated with worker classification and get back to the business at hand. We make sure everyone gets paid quickly and easily and have Client Relationship Managers on call around the clock to answer your questions. All you have to do is call 303-526-4900 or email us. The PayReel team makes video production, live events, media, and entertainment payroll easier, faster, and seamless.