MPL General Counsel Corner – Jumping into the Employment Pool
When I owned a business, not in the legal industry, one of the biggest challenges I faced was finding and keeping qualified employees. Today, as many of you know, that challenge still exists and if anything has only amplified.
On the low end of the pay scale, you can lose an employee or candidate to as little as a few quarters per hour. On the high end you compete with not only higher salaries, but more comprehensive benefit packages which can be offered by larger organizations.
However, putting all that aside, let’s say you are ready to extend an offer to the perfect candidate. How do you hire them? What is the difference between a W-2 employee and a 1099 contractor. If you think you can onboard someone as a 1099 and they are really a W2 employee, you are putting your company at risk if an audit were to occur. On the flipside, if you have a true 1099 contractor and you don’t memorialize that arrangement with certain contractual protections, you are also jeopardizing your firm as well.
I am not trying to dissuade you from bringing more staff on board. Your employees are the lifeblood of your organization. However, some due diligence and thought into your hiring process is needed to protect your company’s interests. Below are some helpful tips to consider when you are jumping into the employment pool:
- What is the Difference Between a 1099 Contractor and a W2 Employee?
- Which is better: The Pros and Cons of 1099 vs W2
- IRS: Independent Contactor (Self-Employed) or Employee?
- SHRM: Employing Independent Contractors
Best of luck with this process and don’t forget that your professional advisors, business mentors and existing staff can be some of your best sources for advice.
Here are a few other things that may be of interest:
- Leading in a Lonely World – A good podcast interview with Rich Vaill, US Naval Academy Grad, Marine Corps Veteran and Business Banker with Spencer Savings Bank, discussing his Jobs for Veterans program.
- Extending Your Runway Without Raising Equity – A good overview of the right type of debt for your company by Aaron Spool from Eventus Advisory Group.
- NFIB Webinar on Small Business Relief Programs (5/12/21 @ 12pm)
- US Chamber of Commerce Global Economic Forum (May 18-19)
- Helpful Coronavirus Resource Pages
As always, please don’t hesitate to email myself (firstname.lastname@example.org), Andy Miller (email@example.com), Christian Miller (firstname.lastname@example.org), Erik Spurlin (email@example.com) or anyone in our office with questions or comments.