In this tough business climate, you need to do everything you can to help your business. This could mean offering unique goods and services, reducing prices, or offering top-notch customer service.
In many instances, though, the only way to stay in business is to trim costs. Reducing expenditures can be done in many ways. But be careful: you want to prevent unwanted consequences.
Not worth the risk
One of the biggest mistakes you can make as an employer is misclassifying your employees.
You may want to claim an individual is an independent contractor and save on taxes and benefits. But if a legal dispute leads to the conclusion the worker was an employee, then you can face serious ramifications.
How much control does the worker have?
When trying to decide how to classify a worker, you should consider a number of factors. One of the most important is how much control you have over the worker’s behavior.
If you dictate when an where an individual works, then it’s more likely he or she is an employee rather than an independent contractor. Providing equipment and training also be indicative of an employer-employee relationship.
Financial control is another major factor to consider. If you are reimbursing the worker’s expenses, paying for his or her equipment, and providing him or her with an hourly wage, then he or she is probably an employee. Other indications of an employee relationship are the establishment of benefits, an ongoing relationship that has no end date, and the worker’s duties are essential to the business’s functioning.
How to get help
That’s a lot to consider, leaving room for misinterpretation. To protect your business as fully as possible by properly classifying your workers, then it might be wise to discuss your situation with an experienced attorney.