Misclassification of a worker can lead to serious consequences for a business. If you classify a worker as an independent contractor and the IRS determines that they are actually an employee you can be held liable for employment taxes and possibly Social Security and Medicare Taxes for that worker.
Luckily, there is a test to determine the status of an worker before you hire them on. Unfortunately, that test has always been complicated and at times unhelpful. Recently, the IRS has gone back in and attempted to rewrite the test in order to make the procedure easier to understand. Whether they accomplished there mission is yet to be determined but they certainly did make the test succinct. Below you will find the current test used by the IRS to determine whether or not a worker should be classified as an independent contractor or an employee.
1. Behavioral: Does the business control what the worker does and how he does it? Does the company have the right to direct or control the worker? Is the company training the worker?
2. Financial: Who holds the right to control the financial aspect of the job being done. Is the worker put in the position where he might take a loss on the job? Does he have a financial stake in the outcome? Are business expenses reimbursed? How is the company paying the worker?
3. Type of Relationship: Are there contracts or employee type benefits between the company and the worker? Does the worker have insurance, a pension plan, vacation or sick pay? Is the relationship only for a specific duration of time or is it indefinite? Are the duties being performed by the worker a key aspect of the company’s business or is the position not completely necessary?
In order to ensure that you don’t run into any problems when hiring on a new workforce it is important to discuss all of this with a small business attorney. The Law Offices of Stanford & Wadler would be happy to sit down with your small business to discuss the best way to hire on workers with the least amount of risk. Call the office today for a free consultation.
Let’s face it. Hiring new employees can be a daunting task. You want the best of the best. You want employees that will have the same passion for your small business that you do. Your want employees that ROCK. Here are 5 simple rules for seeking out and finding those diamonds in the rough.
1. Define what an employee that rocks means to you.
2. Always be searching out potential employees to be interviewing.
3. Always remember that success does not mean motivation.
4. Don’t necessarily hire for experience.
5. Be the type of employee you wish to hire.
By following these 5 simple rules, your are guaranteed that you will be hiring employees that are one of a kind. Remember when hiring on new employees it is important to consult with a small business attorney to ensure you are following the correct measures and not getting yourself into a situation you can not get out of.
The below legislative changes to Texas Business Law are meant to be a quick overview for the Texas small business owner. It is not meant to take the place of advice from a small business attorney. To see if these changes affect your business, call the Law Offices of Stanford & Wadler. [Read more...]
Sometimes our clients find forms on the Internet and use them for their own business needs. But that can be dangerous. They often find that they are not properly protected from liability or that the contracts don’t convey the rights and responsibilities they believed it did. When entering into any type on contract for your small business, you should consult a small business attorney. [Read more...]
When starting a business in the state of Texas, there are many different entities you can choose to form. No matter the entity you choose, the formation will come with it certain roles and responsibilities. This article will lay out the different business entities found in Texas but it is best to consult a small business attorney, such as Stanford & Wadler, in order to choose the entity that will be the best fit for your business.
In order to protect your business, you must protect your assets. Your biggest asset is your company image. Once of the best ways to protect your company image is through the use of trademarks, which the law considers to be a form of property. [Read more...]
So you’ve decided to start a business. Congratulations! If done correctly, this could put you and your family in a situation to support yourselves for years to come. This could be something you grow and sell or something you are proud to pass on to your children. [Read more...]