WORKER CLASSIFICATION

When an independent contractor becomes an employee: A chain of events

When an independent contractor becomes an employee: A chain of events 450 450 Heidi McLean

Pumpkin spiced lattes! Babies! Generation Z (move over, Millennials)! What do they all have in common? They’re a constant reminder that there’s nothing so constant as change. With its ever-narrowing definition of an independent contractor, California is embarking on the real-time evolution of the gig economy. Here’s the chain of events a company and its workers might go through in response to such changes.

When the definition of an independent contractor narrows:

1. Companies reclassify employees… or not

When an independent contractor becomes an employee, her pay structure changes. Even if all the goodies afforded an employee (healthcare, time off, etc.) bring them close to their original pay in practice, their paycheck may look a lot smaller. That’s because it costs a lot more up front to have an employee and employers withhold taxes. While ICs are still responsible for paying taxes, they can also take advantage of many write-offs, which go out the window once they’re employees. Some employers like this structure, feeling it gives workers more ownership in the company’s success. Others say the structure makes their business model unsustainable.

In the latter case, they may restructure the job completely to avoid hiring more employees. Because often new laws precipitate more ways to get around those laws. Another way to avoid reclassifying is to simply operate business as usual and wait to be challenged. Especially in the case of smaller companies, history shows this could take years or not happen at all. Workers might not know or care about the changes. They may opt not to push out of fear or they may not be able to join together to get strong enough influence. This is a risky approach, but not unheard of.

2. Workers quit or stay

Once employers make their choice, employees make their own. If companies do decide to reclassify workers as employees, they then decide if the situation works for them. If not, they often quit (as we discussed in our last post). Some stay, preferring the stability that comes with being an employee.  Some may even get promoted under the new arrangement, as this article talks about in the case of Matthew Johnson, who’d been driving for several companies before becoming an employee at Perennial. With a greater presence at the office and familiarity with the ins and outs of his company, Johnson was able to make helpful suggestions that earned him new responsibilities and a promotion.

Many employers and workers alike viewed the previous arrangement as a symbiotic relationship that worked well for both the business owners and the workers they employed. So if their bottom line becomes unacceptable, workers may tap out and either increase work for their other clients or look for different work altogether.

3. Everything changes

No matter what happens, everything will change. This latest evolution in the economy will be replaced with another, which will upend the last. And so it goes. Again and again and again.  Tell it to the Gen Zer who has never burned a CD before. She still thinks she’s going to be young forever.

 

Note: Can’t get enough? We’ve covered misclassification in depth. See more here.

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 you get everyone gets paid quick and easy, 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 live event, corporate media, and brand management payroll easier, faster, and seamless.

worker classification and small businesses

Worker classification and small businesses: Is the ABC rule the beginning of the end?

Worker classification and small businesses: Is the ABC rule the beginning of the end? 4858 3239 Heidi McLean

California—home of eternal sunshine and landmark lawsuits. One of the state’s most recent rulings, in the Dynamex Operations West Inc. v. The Superior Court of Los Angeles County case, resulted in some changes to the ABC test for worker classification. While the test has existed in some form for decades, this iteration eliminates some of the gray area in deciding whether a worker is an employee or not. It’s the narrowest definition of an independent contractor to date.

This ruling has already caused major changes in the Golden State and, if history is any indicator, may have a cascading effect for the rest of us. We hear a lot about worker classification and the big dogs—the Ubers and the FedExes of the world. Today, we’re looking into what it means for the mom and pop shops and the workers they employ.

What is the ABC test for worker classification?

In California, a worker can now be considered an independent contractor only if all of the following apply:

A: the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;

B: the worker performs work that is outside the usual course of the hiring entity’s business; and

C: the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.

Okay, so what’s at stake?

According to the court’s ruling, “the misclassification of workers as independent contractors rather than employees is a very serious problem, depriving federal and state governments of billions of dollars in tax revenue.” Read: money. For the government, tax dollars are a big part of the equation. Small businesses can avoid certain taxes with fewer employees and independent contractors can write off business expenses and may also underreport their income. Hence the resulting “deprivation.”

And for small businesses such as salons? Well it’s the B of the ABCs that’s upsetting the mom and pop apple cart because their workers perform work that is decidedly within “the usual course of the hiring entity’s business.” According to the business owner in this article, the previous model allows them to keep their doors open. They say they can’t afford to pay their workers as employees and provide the benefits required by law. So with the switch, many of this business owner’s workers quit overnight. Many employers and workers alike viewed the previous arrangement as a symbiotic relationship that worked well for both the business owners and the workers they employed.

This website, for cosmetologists, describes the benefits independent contractors have in the “booth rental” model. Like any independent contractor, they set their own schedule and manage their own business. They also keep any earnings beyond their booth rental fee. That means the harder they work and the more loyal clients they secure, the more they earn. As part of the salon, they get the benefit of the establishment’s marketing as well as possible walk-in clients. On the flip side, they also have the not-so-sexy responsibilities that come with owning their own business. They run their own books, pay quarterly taxes, advertise to get their chair filled, purchase their own equipment, and deal with the seasonal nature of the biz. Independent contractors also don’t get paid time off and are responsible for purchasing their own health insurance.

What about the workers?

Okay, so what’s a hairstylist to do? Well the rule purportedly intends at least in part to protect them and provide “the labor law protections to which they are entitled.” But some are concerned about what the change means for their livelihood. If you spend a little time reading threads dedicated to salon workers and truckers, who often work as independent contractors, you’ll find discussions among people trying to figure out how to navigate this new landscape.

They may choose to accept the lower pay along with the guarantees and security that come with being an employee. That is, if traditional salons operating under the booth rental model decide to stay open. Or they can set up their own truly independent businesses, perhaps operating out of their homes and skipping the salon altogether. This will work better for those with an existing loyal client base. For those just entering the field, it remains to be seen.

Bottom line

If you’re outside of California, don’t think this doesn’t directly affect you. Other states are already starting to use the ABC test too (i.e. Illinois, New Jersey, Maine and Massachusetts). And this isn’t just about salons. Many other operations, from physical therapists to those delivering packages to your door, are affected by this change. Often, in cases like these, one landmark case paves the way for others to follow—begrudgingly though the case may be. So even if you don’t personally feel the effect of the changes, you probably will before long. And what about your haircuts? Are you ready to go to your stylist’s home? Soon, it may be one of your only choices for the services you know and love.

 

Note: Can’t get enough? We’ve covered misclassification in depth. See more here.

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 you get everyone gets paid quick and easy, 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 live event, corporate media, and brand management payroll easier, faster, and seamless.

payroll fraud

Worried about payroll fraud? Here’s how to prevent and detect it.

Worried about payroll fraud? Here’s how to prevent and detect it. 5616 3744 Heidi McLean

The ragtag group of employees who set out to redirect “fractions of pennies” to themselves in the movie Office Space didn’t think of it as stealing. They’re even portrayed as the heroes in the movie—sticking it to the man and finding themselves in the process. Likewise, payroll fraud is so common in the real world that many don’t even think of it as fraud. They’re not thieves! They’re just “redirecting” funds they feel should be theirs anyway. This mindset, along with how easy payroll fraud sometimes is to pull off, makes for a dangerous combination. Businesses with small payroll departments are most vulnerable, but it happens at the big companies and even feel-good nonprofits, too. We’ve collected a tool kit of tips and resources to help you prevent and detect payroll fraud.

What exactly is payroll fraud and why should I care?

Payroll fraud is a misappropriation of funds commonly in the form of paying “ghost” employees or vendors and various types of falsifying wages/hours. The Association of Certified Fraud Examiners (ACFE)’s biannual 2018 Global Study on Occupational Fraud and Abuse covers some of the impact of such fraud. Among its key findings are:

  • Businesses lost over $7 billion among reported cases
  • Small businesses lost more than twice as much per scheme
  • Fraud schemes’ median duration was 16 months

Okay, so how can I prevent it?

As usual, the best approach for protecting yourself is preventing problems in the first place. Preventive measures discourage a would-be fraudster from trying in the first place while also making frauds more likely to be caught early on. Any cost or perceived hassle of preventative measures pales in comparison to the potential cost of lax procedures.

  1. Start at the beginning. Use the Social Security Administration website, E-verify or the IRS website to confirm candidates’ identities. Conduct a background check after that. Continue the process at regular intervals even after hiring. Making this level of scrutiny regular practice ensures it doesn’t appear personal toward a particular employee.
  2. Separate duties. When the same person makes entries, writes checks, and audits the books, they have too much power. Having multiple points of control and separation of duties ensures you keep a system of checks and balances (pun intended) in place.
  3. Conduct internal and external audits. According to the ACFE report, internal audits “accounted for 15% of the frauds detected” and external audits caught 4% of the frauds. Quarterly reviews are a reasonable and healthy standard practice for companies of all sizes.

Something seems fishy. Now what?

So let’s say you’ve taken preventive measures to minimize risk and something still doesn’t add up. Even if they have to get more creative and sneaky, some people will try to overcome the obstacles you’ve put in place. So now you have to dig.

  1. Watch for red flags. This aforementioned article—about the ghosts among us—identifies some of the major red flags to watch out for. Hint: an employee who never takes a day off may not be as dedicated as you think.
  2. Provide a hotline for tips. The ACFE report notes that tips are the most common detection method and that organizations with hotlines receive more tips (46%) to potential fraud than those without (30%).
  3. Follow the money. Corrupt behaviors tend to leave a money trail. More than one employee using the same bank account, vendors you’ve never heard of receiving checks, and unusually high expenses are all signs something may be awry. If something seems fishy, investigate or hire someone to do it for you. And do it quietly so you don’t tip off the fraudster(s) before you have all the information you need.

Bottom line

The ACFE provides in-depth fraud prevention checkup that can get you thinking about the topic in a new way, identify vulnerabilities, and help you determine a course of action to put preventive measures in place. Most payroll fraud, while incredibly frustrating and costly, is highly preventable.

 

Note: A third type of payroll fraud is committed by businesses that misclassify employees as independent contractors to avoid paying payroll tax and other costs associated with employees. We’ve covered misclassification in depth (see more here) and focused on the kind perpetrated against a company for today’s post.

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 you get paid quick and easy, 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 event payroll easier, faster, and seamless.

3 reasons you can’t afford to ignore worker classification rules

3 reasons you can’t afford to ignore worker classification rules 768 951 Heidi McLean

With its settlement just this week, General Assembly is the latest to make news on the worker classification issue. Companies aren’t the only ones paying attention. The Internal Revenue Service (IRS) and Department of Labor (DOL) have enough skin in the game to keep a close eye on the subject, too. When those two pay close attention to something, it behooves all companies to do the same or risk costly, damaging, and time-consuming consequences.

Here are 3 reasons you can’t ignore worker classification rules:

1.   The government isn’t

For years, the IRS and DOL had bigger fish to fry. Lax regulations essentially led to a jaywalker’s attitude among businesses. The thought being that it’s okay to ignore the unnecessarily-restrictive law as long as you look both ways. As the economic landscape shifts and independent contractors rise in prevalence, the financial stakes and potential for missed revenue get higher. In response, government agencies have been ramping up their focus on the subject and the debate on how to define an employee rages on.

The IRS and DOL are not alone. States are joining the fray, attempting to crack down on misclassification, too.

2.   Consequences are expensive

There’s big money at stake. In addition to potential for paying back pay and benefits,you’re looking at a per employee fine and potential legal fees, too. General Assembly’s one million dollar settlement is small potatoes. Look a little further back and you’ll find that FedEx shelled out $228 million in a misclassification case. Then there’s well-known Microsoft example, in which $97 million was paid out plus millions in legal fees in a benefits dispute with its long-term temps. And of course there’s Uber which lost a dispute over whether drivers were independent contractors (as Uber said) or employees (as the law determined).

Just when you thought government scrutiny was driving you crazy enough, here come the lawyers. Where the money goes, they follow. There’s big money in class action lawsuits seeking unpaid benefits, expenses and overtime for workers who can make a case they should’ve been treated as employees.

3.   “We didn’t mean to” doesn’t hold up in court

When you knowingly misclassify employees as independent contractors, it’s called wage theft. When you do it accidentally, it’s called wage theft.

Yes, the rules are confusing. Like many things government, oh what a tangled web the federal and state laws weave. Some laws are interpreted differently from state to state and some tests used to determine status are subjective. But the rules, straight from the horse’s mouth, is a good place to start.

Bottom line

In addition to the financial burdens and time-sucking nature of it all, your credibility is on the line. Getting audited is a PR nightmare and depending on the industry or nature of the company’s business, the press would love to expose a company’s misclassification and actual or perceived abuse of labor laws.

Getting the government, lawyers, and media on your case is a guaranteed trifecta of pain. It can be overwhelming, but even the DOL and IRS recognize independent contractors can be a legitimate part of a business plan and are an important part of our economy. The best way to stay in the clear is to stay in the know. So get smart and there’s no need to burn your W9s and run for the hills.

Need more?

Take our five-minute classification self-audit and review our compliance best practices.

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 you get paid quick and easy, 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 event payroll easier, faster, and seamless.

worker classification

Worker classification confusion, no more

Worker classification confusion, no more 6875 3958 Heidi McLean

If you manage a contingent workforce, you’ve thought a lot about worker classification, compliance, and risk. If you haven’t, but you do manage freelancers, then you are likely either willfully ignoring it, hoping it will go away (it won’t) or drinking too much. First, we’ll talk about why you should care about the subject. Then we’ll get to the good stuff: how to turn those overwhelmed-tears into tears-of- relief because you’ve found a solution and thereby saved your liver.

One of the most important and expensive reasons to pay close attention is because the IRS and DOL are, too. The independent workforce’s rapid growth means heightened scrutiny on accurate worker classification. Your risk of facing an audit has never been greater. At the same time, IRS guidelines are more complicated than ever.

HERE ARE FOUR TIPS TO TAKE THE STRESS OUT OF WORKER CLASSIFICATION:

1. Take a compliance crash course to determine whether your independent workers are truly independent

Independent Contractors (ICs) are self-employed, hired to do a specific job and paid specifically for that job. Unlike a regular employee, they pick their jobs and regularly move from client to client, business to business. Also referred to as freelancers, consultants and “1099’s”, they report the payments received as business income and pay self-employment taxes.

If the following statements are true for your independent contractors, you’re on the right track.

  • Your contractor has an established business entity, with a business name and EIN to which invoice payment is made
  • Your contractor provides services to other businesses outside your firm
  • Your IC provides certificates of insurance, including at the least, coverage for general liability insurance and workers’ comp insurance
  • You have a signed per project Agreement for Services between your company and the contractor

Check out our self-audit tool and learn about keeping your company within the confines of right and wrong.

2. Take preventative security measures to mitigate risk

Vendors to large corporations must be held accountable to any client security program that helps to protect the company from threats. PayReel has installed, and pays close attention to, strict security measures and the demands of our client security environments such as:

  • Expanded insurance policy packages necessary to manage various risks involved in working with contingent workers
  • HIPAA-based technology and operational security to protect your company’s and your workers’ information at the highest level
  • The ability to adapt to client security requirements and processes
  • Ongoing system testing to detect vulnerabilities, unauthorized access or malicious activity
  • Closed network and storage that maintains and protects data integrity
  • Employee management and awareness of employers’ physical goods such as laptops and key cards to limit unnecessary access to company information by contractors

3. Engage strategic partners

You don’t have to understand all the ins and outs of worker compliance, but someone making decisions does. A strategic partner helps ensure all your freelance contractors are properly classified by vetting the work, the worker’s role, evaluating the risk and making a classification decision. In the context of contingent workforce regulations, PayReel pays close attention to all employer obligations at the federal, state and local levels, including wage & hour rules, per diem, ACA tracking, and sick leave mandates. PayReel also covers the following:

  • Stay up to date with the Affordable Care Act (ACA) and closely manage all health benefits for its employees
  • Track and keep accurate records of all employees’ hours accrued, time used and sick leave available in order to maintain compliance with legislation in locales where sick leave is mandatory
  • Regularly monitor changing wage and hour laws, and stay ahead of the compliance curve related to minimum wage and overtime eligibility
  • Remember that an independent contractor’s classification might change depending on his or her engagement or project, and monitor the ongoing work environment to maintain compliance with classification regulations

The bottom line

This stuff matters and will bite you in the butt if you don’t get on top of it. But there is hope. If you don’t want to or don’t have time to learn all the ins and outs, we’ve already done that for our clients and can do it for your business. Talk to our team today to learn how you can avoid the risk of an audit.

About PayReel

At PayReel, we minimize the time and effort it takes to get you ready for your project, make sure you get paid quick and easy 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 event payroll easier, faster, and seamless.

The next time you work an event or a production, tell your supervisor you love working with the PayReel team.

sick leave

February 2018: Month in review

February 2018: Month in review 5808 3876 Heidi McLean

January took forever and February flew. Just like that, the second month of 2018 is over. Below are a few of the topics in employment and politics that made news in the shortest month of the year.

 

The FMLA turned 25…and had a quarter life crisis 

On Feb. 5th, 1993 the Family and Medical Leave Act, which gave employees job protection to care for sick family members, was enacted. Some of the questions coming up around its birthday are:

  1. Should that time off should be paid? It’s up for debate, but at least two Trumps and a Rubio say yes.
  2. Who qualifies as a family member? Austin’s guidelines leave room for interpretation.
  3. Does it go far enough to protect everyone, including low wage workers? And what about parents?
  4. Will the Koch brothers and cronies be able to win the fight against the aforementioned FMLA expansions?

 

People got sick…or at least sick of work

Thirty-precent of prison guards called in sick for Super Bowl Sunday. And it happens every year. But it turns out, the real problem may be that Americans don’t take enough sick leave. Meanwhile, Airlines sued Washington State over sick leave laws and Maryland’s sick leave laws got delayed in Senate.

Interns and ballers said “Show me the money!”

As Vogue took criticism for unpaid internships, Carmelo Anthony and others called the NCAA corrupt. It all brings up the bigger question: is it time to classify internships and treat college athletes like employees?

It was quite a month in employment. What stories caught your eye?

About PayReel

Producing multimedia content and executing live events can be chaotic. At PayReel, we make sure our clients are able to hire who they want, when they want and that everyone is paid properly. Leave the details up to the PayReel team so you can focus on pulling off a flawless production. Contact us anytime at 303-526-4900 or by emailing us here.

Relax. We got it.

January 2018: The Month of Many Mondays

January 2018: The Month of Many Mondays 150 150 Heidi McLean

January 2018 is over (finally?) and it’s official: this year is already a doozy. It’s not that it’s all been bad, it’s just been…a lot. Below are a few (really, these are only a few) of the topics in employment, politics, and entertainment that made news in the first 31 days of 2018.

In employment

January 2nd ― A woman in Sydney wins a worker’s comp claim against Woolworths for a “savage bird attack.” Might sound crazy until you find out that the bird is responsible for injuries requiring treatment for at least 10 others.

January 12th ― Maryland passes the Maryland Healthy Working Families Act (“The Act”) and now requires paid sick and safe leave for companies with fewer than 15 employees. Maryland is the 9th state in the country to hop on the paid sick leave bandwagon.  

January 24thStarbucks announced, in addition to giving all domestic employees a raise, it’s giving baristas paid sick leave, stock grants, and parental leave (including for the parent who didn’t give birth).

In politics

January 13th ― Hawaii accidentally (debatable) sends a false ballistic missile alert, sending residents and visitors (i.e. anyone with a cell phone) into a panic.

38 minutes later ―Hawaii issues correction, sending said cell phone owners into false near-death induced soul-searching.

January 20th – The government shuts down.

January 22nd – The government reopens.

January 30th – The State of the Uniom…err Union address. Trump gets the introduction of a WWF fighter (see Fox’s highlight reel) and Democrats hold their applause (see CNN’s highlight reel).

In entertainment

January 28th – The Grammy’s: Where Bruno Mars and Kendrick Lamar cleaned house, James Corden brought down the house, and Hillary Clinton took yet another jab at the White House. And in a reminder that our culture still has a lot of work to do to get our proverbial house in order, Kesha offered a sharp rebuke to the tune of “Prayin’ and Janelle Monáe said, #Timesup.

January 31st – Super blue blood moon. A beautiful overachievement, 150 years in the making. Just like the month of January, the moon decides to pack all sorts of events into a short timeframe.

January 31st – The nation takes a deep breath, and a nap…before heading into month two. To which February said, “Hellooooo, Super Bowl!”

These are just some of the headlining moments of January. We can only guess what’s next. What makes your list of notable January headlines? Share in the comments below.

 

About PayReel

Producing multimedia content and executing live events can be chaotic. At PayReel, we make sure our clients are able to hire who they want, when they want and that everyone is paid properly. Leave the details up to the PayReel team so you can focus on pulling off a flawless production. Contact us anytime at 303-526-4900 or by emailing us here.

Relax. We got it.

contingent workforce

Questions we’re asking about the contingent workforce in 2018

Questions we’re asking about the contingent workforce in 2018 4412 2941 Heidi McLean

The relationship between workers, employers, and government regulations is a balancing act. Each affects the others as inter-connectedly as any of nature’s most delicate symbiotic relationships. The contingent workforce is changing the employer/employee landscape everywhere. Similarly, government changes in healthcare and tax codes are sending a ripple effect through the system. Here’s just a taste of what 2017 has us thinking about as we move into the New Year.

  1. Healthcare: The subject is one of the biggest debates of our time. In theory, the Affordable Care Act made working independently more feasible than ever. One question we face as the Trump Administration chips away at the ACA is whether contingent workers will need to return to employee status or stay in jobs they’d otherwise leave.
  2. Taxes: The theory behind the new tax code maintains that changes benefiting employers will make American businesses more competitive and give the US economy a boost. It remains to be seen how or if these benefits will translate to contingent workers’ wellbeing.
  3. Workers’ Rights and Employers’ rights: Uber and similar companies are going through the early rounds of redefining the legalities around the new landscape. Where do workers’ rights end and employers’ rights begin? It’s a question that will continue to be duked out in courtrooms in 2018.
  4. Natural disasters: 2017 was a record-breaking year for natural disasters. Hurricanes and immobilizing snowstorms can put independent workers out of work for a long time without the protection of an employer. Without some preventative planning, small businesses may be at risk for having to close doors altogether. 
  5. #MeToo: In a way that only social media can do, the #MeToo movement has given a loud voice to a quiet, but longstanding complaint. What was formally a pervasive problem across all industries is now the stuff of crumbling careers and sweeping policy change. In the wake of the attention, many big companies adjusted their events, including prohibiting booze, at their 2017 holiday parties in an effort to prevent any bad behavior.
  6. Paw-ternity leave? With the woman who was granted two days’ sick pay to care for ailing dog, 2017 has us wondering if paw-ternity leave will be yesterday’s headline and tomorrow’s standard practice.

These are some of the issues that made news in 2017 and will continue to shape the economic landscape. We can only guess what’s next, but there’s no doubt it’s a time of great change in the country and economy. What’s on your radar for the coming year?

About PayReel

Producing multimedia content and executing live events is chaotic. At PayReel, we make sure our clients are able to hire who they want, when they want and that everyone is paid properly. Leave the details up to the PayReel team so you can focus on pulling off a flawless production. Contact us anytime at 303-526-4900 or by emailing us here.

Relax. We got it.

 

 

 

 

This Worker Classification Myth is Hurting Your Business

This Worker Classification Myth is Hurting Your Business

This Worker Classification Myth is Hurting Your Business 2000 2000 Heidi McLean

Sorry, y’all: The five-second rule is bogus. Germs don’t offer a grace period before jumping on your food. Not even your last bite of the really delicious stuff. But that one about metal objects dissolving in a glass of Coke? Still up for debate. And we won’t be testing it to find out.

Myths can be dangerous, silly, or in the case of worker classification—bad for business.

There is a fine line between an employee and an independent contractor and laws surrounding worker classification are confusing. We’ve seen companies go to great lengths to comply with nonexistent rules, so we were compelled to bust one of the most damaging worker classification myths we’ve seen.

 

The Myth About Worker Classification

After a certain amount of time working for you, an independent contractor must be reclassified as an employee.

We think this myth likely comes from one-time best practices that were interpreted as hard and fast rules. Wherever the myth comes from, we’ve seen clients build all sorts of policies to get around the supposed law. We’ve seen them hire workers for six months, drop them for a period of time, and then rehire them, for example. Some companies even refuse to rehire independent contractors after working with them for a certain amount of time because they’re afraid they’ll have to provide all of the benefits associated with hiring an employee. Not only are these policies time consuming, they can hurt businesses that rely on trustworthy freelancers.

 

The Truth About Worker Classification

We think it’s time for everyone to bust the myth and bust free from self-imposed restrictions.

Here’s the liberating truth: If you find a good contractor and want to use them over and over, you can. There are rules, which vary by location, but there are also legal ways to keep your best people working for you.

If you’re confused by compliance laws and fear your workers are misclassified, PayReel can help. Reach out to our team of experts on all things freelance. Get away from the burden of onboarding, payrolling and classifying your workers and focus on what you love.

About PayReel

Producing multimedia content and executing live events is chaotic. At PayReel, we make sure our clients are able to hire who they want, when they want and that everyone is paid properly. Leave the details up to the PayReel team so you can focus on pulling off a flawless production. Contact us anytime at 303-526-4900 or by emailing us here.

Relax. We got it.

contract work payreel

Contract work: It ain’t your father’s career track!

Contract work: It ain’t your father’s career track! 1000 750 PayReel

The workforce is evolving. There are fewer full-time positions and more project-oriented, “we’ll call you when we need you” jobs. Funny thing is many young, culturally diverse people coming into the workforce don’t necessarily want to be anchored to a single employer. They certainly aren’t looking for the stable but inflexible gigs their parents coveted. These workers, in some circles referred to as “millennials,” are not looking to belong to one company. They are looking for contract work – something that allows them to explore and thrive.

The changing landscape

Boredom is the true enemy of the emerging workforce who have spent a lifetime consuming quick-moving digital content. That means employers have their work cut out for them to keep these expressive, gifted, and demanding people engaged. Companies are responding with cereal rooms, napping pods, and mandatory time off / unlimited vacation (that’s Upworthy we’re talking about and yes, they’re hiring).

Why people choose contract work

Some people love the gig economy because they get to choose when and how to work. They can pick the jobs that appeal to them. They can decide whether to accept a job or hit the slopes. It has (at least in theory) restored the work / life balance that many millennials feel their parents’ generation lost.

Drawbacks of contract work

With all the benefits of contract work, it may seem like there isn’t really a place for brick and mortar offices and full-time positions anymore. And while their prominence in the workforce is decreasing, they still exist (and will for the foreseeable future). We still need them. For now. And besides, contract work still has its drawbacks, including less stability and fewer built-in benefits such as 401K matching, sick days, paid holidays, and healthcare. Having fewer workers on-site can also pose challenges for businesses because the office environment encourages team morale and facilitates communication, which in turn supports a unified brand identity. Being in one location also allows for in-person meetings and there simply isn’t an adequate substitute for that yet.

The bottom line

If you make your living job to job, PayReel’s real team of real people is here for you. We provide personal service to make sure employees get paid quickly and accurately. Go ahead, give us a shot!  You can call us anytime at 303.526.4900 or reach us by email at info@payreel.com.  We look forward to hearing from you.

 

About PayReel

At PayReel, we minimize the time and effort it takes to get you ready for your project, make sure you get paid quick and easy, and have customer service agents on call around the clock to answer your questions. The PayReel team makes event and corporate payroll easier, faster, and seamless.

The next time you work an event or a production, tell your supervisor you love working with the PayReel team!