Employees vs. Independent Contractors: What You Need to Know When Adding to Your Team

Are you a jewelry designer who is ready to add to your team but you aren't sure where to start? Does the thought of committing to a full time or part time employee make your nervous? How much do you want to be able to direct the person working for you?

Before you go on hiring someone, you need to know the pros and cons of hiring an employee vs. an independent contractor. Today, I chat with Genavieve Shingle who is a small business attorney. She likes to call herself the affordable attorney which is awesome for those of us who have small businesses.

I love her clear concise explanation of all things “Legal” and we are excited to have her as a contributor to our Multiply Your Profits course.

In this video you are going to learn:

1. The key differences between employees & contractors
2. How to determine which is right for you
3. Plus, a surprise revelation about having a contractor work in your office or studio.

After you watch the video, answer these questions in the comments below:

1. What confuses you the most about hiring an employees vs. a contractor?
2. Do you have people on your team? If so, are they employees or contractors?

You can find Genavieve at GenavieveShingle.com. Make sure you check out her contract templates because they are an awesome resource for small business owners who don’t have a lot of cash to invest in attorneys who want to charge thousands for a contract.

If you haven’t checked out our FREE training series and grabbed your Jewelry Business Blueprint, make sure you head on over for more info.

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9 Comments

  1. Peggy Li Creations Handmade Jewelry on April 15, 2014 at 11:00 am

    Hi! Yes, this is always a hot topic. I’m confused as to whether I can have an independent contractor indefinitely (just keep renewing their contract)? I’m not sure CA allows this. If not, how to handle?

    Also, what is the diff between an independent contractor and having someone make pieces for me that I purchase at their wholesale rate? If I’m purchasing wholesale, I don’t necessarily need a contract, I’m placing a purchase order?

    thanks!
    Peggy

  2. Peggy Li Creations Handmade Jewelry on April 15, 2014 at 11:09 am

    Having interns is also a little confusing… how to have an intern/compensate them. How to transition an intern to a contractor or employee?

    would love to better understand all 3 options.

    thx!
    peggy

    • admin on April 19, 2014 at 4:32 pm

      Peggy,

      Great questions and feedback! Each state and sometimes city is different in what they will and will not allow. Best to check in with your accountant on the laws – you can also check with online sites like Legal Zoom.

      Regarding your question: What is the diff between an independent contractor and having someone make pieces for you?
      If you are buying wholesale you do not need a contract. However, if you are hiring someone as a contractor you do need a contract.
      Email me details so I can better understand the overall picture.

      We will certainly be diving deeper on this subject in our MYP course.

      xo Robin

  3. Melinda O'Keefe on April 16, 2014 at 6:42 pm

    I got audited by New York State Employment and Disability in December 2013 for this VERY topic. I had to provide three years of ALL invoices, pay stubs, time sheets for every single person who worked for me, freelance and employee.

    Turns out, an independent contractor or freelancer, MUST have their own business with their own tax ID number. Not another job, like a 9-5 office job and is doing this in their spare time, but a business that they pay THEIR own workman’s comp and disability. They have to present that certificate to you to do the job you request. They must have their own place of business, their own tools and they will provide YOU the price for the job, not the other way around. They then provide you an invoice for services rendered. Much like a painter, landscaper, building contractor you would have do work at your home.

    Anyone who crosses your business thresh hold to work at your establishment, be it studio, basement or kitchen table, is an employee. Anyone who comes after school, on the weekends, works part time as an intern or mother’s helper, is an employee. You must pay their workman’s comp, disability insurance, and all relative federal taxes as payroll.

    Keep ALL records, do Quickbooks and keep it all in order.

    After the anxiety and worry, I only had to pay $150, with interest and penalty. IF you get caught with a long term “contractor” who worked at your place, you will be liable for their back taxes with penalty and interest from the start date of their employment. It’s better to stay legal when it comes to this subject.

    As far as purchasing pieces made off site, yes, you would pay their invoice for the pieces. They would have their own business, just like any vendor would.

    Good point about service contracts. Always have those in place.

    • admin on April 19, 2014 at 4:21 pm

      Melinda, thanks for the important information!

      xo Robin

  4. Mavic Reyes on April 17, 2014 at 1:45 pm

    Hi! I am just in the very beginning process of starting my own jewelry business and finding Flourish and Thrive Academy is a real blessing. The free training videos are all very very helpfil and informative and i am learning so much! I will deginitely keep in touch as i go through the process og starting my jewelry business….really really need as much support as i can!! Thank you again.

    • admin on April 18, 2014 at 7:51 am

      Yay…Welcome here!

  5. Suzi on April 21, 2014 at 12:37 pm

    Fantastic interview! You guys are awesome! <3

  6. Michael on April 26, 2014 at 1:56 am

    Informational Interview for the people like who was confused whether to hire employees or contractor. I prefer independent contractors over employees.

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