Why is it important to distinguish between employee and independent contractor? What's the difference between hiring an employee and an independent contractor? Can I 1099 an employee? As an HR professional Dana Dowdell guides us through the murky waters of hiring - especially when it comes to some of the important factors employers have to consider when hiring employees and independent contractors.
Follow the podcast at @itsjustbusinesspodcast on all the major podcasting platforms.
Connect with us:
To get in touch with us, email the podcast at itsjustbusinesspodcast@gmail.com.
Join us on Facebook, Instagram, or LinkedIn - we appreciate your support!
www.itsjustbusinesspodcast.com
You can find Dana @adashofboss, @dana.dowdell and @hrfanatic
Dana Dowdell – Boss Consulting – HR Consulting
Google - https://tinyurl.com/y4wxnavx
You can find Russ @reliable.remediation
Russ Harlow – Reliable Remediation – Disaster Restoration
Google: https://g.page/r/CXogeisZHEjMEBA
Why is it important to distinguish between employee and independent contractor? What's the difference between hiring an employee and an independent contractor? Can I 1099 an employee? As an HR professional Dana Dowdell guides us through the murky waters of hiring - especially when it comes to some of the important factors employers have to consider when hiring employees and independent contractors.
Follow the podcast at @itsjustbusinesspodcast on all the major podcasting platforms.
Connect with us:
To get in touch with us, email the podcast at itsjustbusinesspodcast@gmail.com.
Join us on Facebook, Instagram, or LinkedIn - we appreciate your support!
www.itsjustbusinesspodcast.com
You can find Dana @adashofboss, @dana.dowdell and @hrfanatic
Dana Dowdell – Boss Consulting – HR Consulting
Google - https://tinyurl.com/y4wxnavx
You can find Russ @reliable.remediation
Russ Harlow – Reliable Remediation – Disaster Restoration
Google: https://g.page/r/CXogeisZHEjMEBA
Dana Dowdell 00:06
I'm Dana
Russ Harlow 00:07
and this is Russ,
Dana Dowdell 00:08
and you're listening to it's Just Business.
Russ Harlow 00:11
We're a couple of small business owners who are trying to figure it out as we go. And as we grow our businesses, we want to help you grow yours. If we've learned anything, it's not personal. It's just business.
Dana Dowdell 00:24
Hey Russ.
Russ Harlow 00:25
Dana, how are you today?
Dana Dowdell 00:27
I'm okay, how are you?
Russ Harlow 00:28
Doing well, but I have some questions.
Dana Dowdell 00:31
All right. We're gonna, I think, address those questions. We're gonna do a little bit of a value add episode today. And we're going to talk about some of the parameters and best practices around hiring independent contractors and using independent contractors versus employees and using employees. And we've touched a little bit on this topic, I think, when we've talked to some of the attorneys. But we're really going to take a deep dive and talk a little bit about best practice and how it can help your business kind of grow.
Russ Harlow 01:12
Would it be smart to have like a human resources professional on?
Dana Dowdell 01:17
I'm bias. But yes.
Russ Harlow 01:20
I think you're right. Because if if our listeners haven't been paying attention, you are a human resources professional.
Dana Dowdell 01:27
That is correct.
Russ Harlow 01:28
I think we've got the right person to talk to.
Dana Dowdell 01:31
I would hope so. And, you know, as we talk through this, I am not an attorney. So I am giving, I'll be giving the advice and the knowledge from the standpoint of of human resources and best practice. But when in doubt, you always want to make sure you have that attorney, you know, part of that bail team that you can check in on this subject in case you ever find yourself in hot water around contractors versus employees. So I want to ask you Russ, what is the structure of your business? Do you use independent contractors? Have you been an independent contractor? And do you have employees?
Russ Harlow 02:10
I have employees. And we have worked as a sub for other contractors, if they need to bring in a specialty contractor like us doing mold remediation or something, most often we are making our customer connections directly. And a lot of people in our industry, let's say, for example, they just do mitigation like us, we just do the cleanup, dry it out, get the mold out, whatever. But we don't do rebuild. A lot of restoration companies call themselves full service, but they subcontract all the work, and then they mark it up. And I when I try to educate my customers about it, because they're just going to end up paying more because of the markup. So I can help them find good referrals. So that's, but in our industry, too, in the contracting sphere, I find a lot of guys are like, Oh, I don't feel like paying taxes for this guy. So I'm just gonna 1099 them. And I think that's where people start getting in trouble. Am I right?
Dana Dowdell 03:09
It is. And I think it's important as we talk about this topic, you know, there's there's two folds to it. There's you like you just mentioned working as a subcontractor. So in my business, like I'm a, we are subcontractors of the businesses, not subcontractors, I guess, independent contractors, of the businesses that we serve. And there are certain industries where that's really popular, like you said, the trades industry, I think roofing is another one where that happens a lot. And kind of building services, where you as the, as the consumer might be dealing with a particular company. And on the other side of that particular company are a series of subcontractors that help get the job done. Right. So I think that's something to consider when you're doing business is like, do you want to be the face of the business? Or do you only want to be a subcontractor?
Russ Harlow 04:10
Yeah, and I think the other thing too, is, do I want to subcontract work and leave my reputation to somebody else's ability to do it well, and do it to our standard?
Dana Dowdell 04:24
Right, you were saying before you knew a plumber?
Russ Harlow 04:28
Yeah, so in fact, work. Yep. I was reaching out because plumbers are great contacts for us. We do water damage mitigation. And usually one of us is the first on the scene. So if I'm there, and we got a pipe break, while we need somebody to come and take care of it. If he's there and there's six inches of water in a basement, he needs me to come and take care of it. So I always look to make contractors, I mean connections in those spheres. But this particular plumber is like, yeah, I don't do a lot of service work. I work as a sub for a lot of general contractors. So I don't have to deal with the cost Customer and dealing with that service to an eight to 10 different customers the day, I show up doing my install the general contractors dealing with a customer, and I just go and do plumbing. I was like, Okay, this probably isn't a good fit for us. But I'll keep that in mind. So I can pass it on to some general contractors. I know.
Dana Dowdell 05:18
Yeah, that's interesting, because I feel like when, and I think I could be biased in this way as well, just because I have such an intense interest in the connection with my customers like that I could never find myself in a space where all I'm doing is contracting. But for others, it's obviously different. And they might find that kind of structure to their business a bit easier.
Russ Harlow 05:42
Yeah, absolutely. And I'm like you, I just I can't imagine. I mean, our reputation and customer services, is everything. And so I can't imagine leaving that to someone else. Or, you know, relying on someone else's, you know, reputation. I just, I don't know, I can't let go of that.
Dana Dowdell 05:58
I second that and second and third and, and quadruple that. Because it's it's so important to kind of how I, my brand and how I choose to do business. So So that's part of it is, you know, as you're doing business, do you want to be an independent contractor? Or do you only want to do subcontracted work? And then there's the other side of it, which is the hiring, you know, as a business, are you hiring subcontractors? Are you hiring employees or using a mix of both? So you've been a subcontractor. Have you used subcontractors in your operations are independent contractors,
Russ Harlow 06:39
I have not had to sub out any work. I mean, there are times small things that I might have to do that for. I've only worked as a subcontractor for others when I come in, and I have to do some specialty work that they can't do. You know, and that happens sometimes. But like I said, I prefer not to crank up costs on the consumer, you know, by just trying to mark up and I don't want to be managing an entire claim for somebody and dealing with three or four subcontractors. And that in some customers want that they don't want to have to deal with it. And I understand that.
Dana Dowdell 07:15
What about like your marketing person or the person who does your SEO or website or bookkeeping?
Russ Harlow 07:26
I mean, yeah, I guess that's all I mean, I guess that's technically subcontractors. If I mean, they just, they send me a bill and I pay it. They're independent contractors.
Dana Dowdell 07:39
So you know, well, I find it in the work that I do. A business gets to the point where you have to start farming out some of the work that you're doing. Right? And it, it may look like that you do you farm out your social media, or you farm out your CRM, your customer service management, maybe your internal calls, bookkeeping, social media, marketing, invoicing, accounts receivable, accounts payable, debt collection, there's 101 things that you can subcontract out. That helped to make your life a little bit easier. And when you are doing that, you can often find yourself in a situation of like, should I should I hire that out and bring on an independent contractor? Or should I hire an employee to do that work? And that's kind of like the fork in the road that a lot of people find themselves in when they're in this growth mode. And it's kind of a risky fork, if you will.
Russ Harlow 08:55
So my question is, so let me ask you this, because I'm those independent contractors that are, you know, my bookkeeper and everything else in my marketing help, and I mean, are they are they 1099s?
Dana Dowdell 09:15
So 1099, and independent contractors are often used kind of interchangeably. And especially with the increase in like the gig economy, so Uber and Lyft, and DoorDash and Instacart. There's been kind of a heightened scrutiny of whether or not those roles and those responsibilities are actually independent contractor work or employee work, you know, like there's been a lot of court cases as to whether or not Uber drivers are employees of Uber or if they're independent contractors. And this whole idea of independent contractor versus employee stuff. It's an IRS issue, it's a tax issue. And then it's also a department of labor issue. So you want to make sure that you're doing it right. So I want to talk a little bit about, you know, what to look for when deciding whether or not someone's an independent contractor or an employee.
Russ Harlow 10:21
So now I gotta go find out if my bookkeeper is sending herself a 1099.
Dana Dowdell 10:26
I would hope she is, okay. Usually, it's a few pay them more than $600 in a year do you have to give them a 1099 I think unless you pay them with a credit card, and then you don't. But again, talks to your talk to your tax professional about that stuff. So, I have a mix of both in my business, I have employees, I have two employees that work for me as a W2, I have subcontractors who I sometimes use for project work related to what we do as a business. And then I also have subcontractors that do my social media, my virtual I'm a virtual assistant, she's a subcontractor. And I'm also hiring a subcontractor to do some copywriting. So I have like, you know, a three prong approach to how I get the work done in my business. But so I like to think about employees and independent contractors as kind of like, they're two separate, completely separate things. And a lot of it is about control. So when you're looking at whether or not someone is independent, is an independent contractor, you want to look at how much control do I have over what they do on a day to day basis. So usually, when someone's an independent contractor, the company or the person hiring them, has control over the end product, not necessarily how they get to that end product. When you're looking at that control feature, from an employee standpoint, you not only have control over the end product within an employee, but you have a lot of control over how they get to that end product. Does that make sense?
Russ Harlow 12:19
Yep, I think so. I mean, when I tell my guys, hey, we're gonna be here at seven, and we're going to this job site, and this is the job we're going to do. And we'll be done at four, and you'll take a break for lunch. And, you know, these are the allowable things. And then the other time is I hand a folder of invoices for the month to my bookkeeper, and sometime in the next four weeks, she gets my QuickBooks squared away.
Dana Dowdell 12:42
Exactly. You get 10 points. So something else that comes up when we're looking at this topic is that, you know, people will hire their best friend or like their neighbor's kid to do some work. And they'll just say to them, like, Oh, I'm just going to 1099 them. But again, you have to look at the nature of the work. Because traditionally, in order to look at someone as an independent contractor or a 1099, they're regularly engaged in that work outside of just what they're doing for you. So like your bookkeeper, I imagine your bookkeeper, does that work for other people? Yes. Right. So, that is a true independent contractor, if your bookkeeper was your niece, who you just happen to pass those invoices over to on a monthly basis, and you're the only one that she was doing that work for, that's not really, she's not doing that business for for other people or other companies. So it'd be a little bit more challenging to look at that as an independent or true independent contractor. When we're also looking at this, we're looking at the risk. So there's risks associated with having independent contractors versus employees. And a lot of those risks come with taxes. So when you're working with an independent contractor, that independent contractor carries that burden of income tax, payroll tax, sales tax, if it's applicable, right, so they're, they're the ones responsible for carrying that responsibility when you have an employee, the employer. So you as the business owner is responsible for collecting those income tax contributions and and remitting them to the state and federal agencies. You're responsible for playing paying Social Security on their behalf. And then there's always these other state programs. So like we're in Connecticut, so there's Connecticut paid family leave that an employee has to contribute to so each party It carries obligation, I'll say around taxes.
Russ Harlow 15:06
All right. So a couple of different scenarios, just from my own perspective, because I know it as well. So subcontractor, or a general contractor hires me to come and do some specialty work for them. I'm Tech, I'm a 1099 on that job. They're responsible for paying, you know, whatever sales tax or whatever it is charging the customer for that, et cetera, et cetera. Now, a business hires me to come in and do work, we have a contract. I give them a W9, to show them that. Yeah, I'm collecting and paying all taxes. You don't have to call me whenever you're doing your taxes and send me a 1099. Because I've already taken care of it. That's the purpose of giving them that information, correct?
Dana Dowdell 15:47
Yeah, I mean, they still made 1099. You but you know, the key is the kind of the contractual obligation of that relationship. So when your sub contracting, you're a subcontractor for that business, right? That's the that's the they should still probably be 1099.
Russ Harlow 16:11
When I'm working as a subcontractor, if I just go to do business, and I have a contract, contractual relationship with a customer, because they've got mold or whatever. They're just like any other customer there. I'm not a subcontractor for them.
Dana Dowdell 16:25
Right. Right. So and then when you're, when you are the kind of the face of the business, the relationship is between you and the business that you're serving. And so, back to when we talked to Nicole, about contracts, or Vicki last a couple episodes about contracts, like having that contractual relationship established is really, really important. You know, does it say in your your contract, that you are an independent contractor, and that you're responsible for all the payroll taxes? I hope it would, because that's covering you're behind, and also the person or the company that you're serving is behind. We also look at it from, like a labor and employment law standpoint. So when you're working with independent contractors, HR, labor, employment laws don't apply to those relationships. It's it's contract law. So it's tort law. When you are working with employees, you're subject to Fair Labor Standard act, minimum wage requirements, overtime requirements. So there's a little bit more legwork around having that employee employer relationship, however, you get the control of how they get to the outcome that you may not necessarily get when you're hiring an independent contractor. Right.
Russ Harlow 17:53
So I mean, I guess the question comes in, and where I see a lot of people run into problems is when they're, they just decide it's easier to 1099 Somebody. Now, if I get a big job, and I have to hire some temporary labor, I mean, those are independent contractors, the company that I'm hiring that temporary labor from, and so that's not hiring an employee. But if I use a temporary labor agency to find a hire for me, and then I bring them on as an employee that changes that relationship with us, right?
Dana Dowdell 18:23
Exactly. Yeah. So when you're using temporary labor, that's like a b2b relationship, right? That's you as the business that's hiring another business to provide you labor. That's kind of the same way sub contracting works, right. So the main contractor is hiring another business to supply labor. So it's a b2b relationship. If you're working with like a staffing agency, and they are feeding you kind of temporary employees. Oftentimes, if it's not a b2b relationship, those employees will go on your payroll. So and it does, it happens a lot. And it happens a lot in the trades where they're, you know, they want to hire someone, and they're like, Oh, I'm just going to 1099 them, when really, you're telling them where they need to be, when they need to be there, how long they need to work, you're providing them tools, resources, a regular schedule, and you're controlling the work that they do when they're there. And really, that's more of an employee employer relationship.
Russ Harlow 19:26
And it's really not fair to the person you're bringing on. Because they may not realize it, how much one it may not be legal altogether, but to their, they're like, oh, yeah, I didn't realize I have to pay taxes out of that. And all of a sudden, they're declaring these things and they're like, What do you mean I owe? You know, $7,000, what are you talking about? I don't understand. So it's not it's not fair to the people that you're, you know, are helping you and your business either.
Dana Dowdell 19:55
And that's usually where these issues come up. As you 1099 Someone they go to file their tax because at the end of the year, they realize that they didn't have any payroll taxes or income taxes taken out. And they get frustrated or annoyed. And, you know, if you're, it's the, it's the employer or the businesses duty to make sure that that relationship is the appropriate relationship. And so kind of taking the easy way out and just saying, I'm going to 1099 someone, or I'm going to pay them cash or pay them under the table can have negative consequences at the end of that relationship.
Russ Harlow 20:36
So as an employer, it's our responsibility to do the right to know what the right thing is to do, and to do it. And the laws are there for a reason. So, you know, workers don't get screwed.
Dana Dowdell 20:49
Sure, and it's, you know, it's, we're In Conncticut, Connecticut, it's a no fault work state, and it requires you to carry workers compensation insurance. So like, that's another component is that if you're hiring employees, you want to make sure you have the appropriate insurance to cover that relationship. When you are hiring independent contractors. They often carry their own type of like business liability insurance, which helps protect any instances of things going awry in that relationship.
Russ Harlow 21:26
Yeah, and I think the other thing, too, is, I get asked on my audit for workers comp every year, you know, how many subcontractors Do you hire, how much of your businesses to subclass etc, etc. And that's an it's become habit too, because anytime I have to subcontract work, or if I work for a business, I send them those tax forms at W nine, so that they can have my tax identification number and a certificate of insurance to share that I have all those coverages. And they're protected as well, because they're named as a certificate holder.
Dana Dowdell 21:59
It's funny when we talked with Vicki last week, two weeks, two weeks ago, she said something that really stood out and it was something came along along the lines of are you playing business? Or are you a legitimate business? And so this kind of goes along with that, you know, when you're appropriately categorizing those relationships, it's it legitimizes your business when you're carrying the appropriate insurance that legitimizes your business. And so yes, it might be costly. You know, it's costly to carry workers comp insurance is costly to run payroll. But if you're appropriately categorizing those people that work for you, or those people that support your operations, it can save you from huge responsibilities around Wage and Hour issues, department of labor issues, and IRS issues.
Russ Harlow 22:51
Issues could also be caused if you don't have the right insurance or the right. You're set your business up properly when they come for your house and everything you own. Because so let's talk a little bit about if you get caught doing something wrong, how does that affect you, your business and everything else?
Dana Dowdell 23:12
Well, so again, it's usually an IRS issue. So they might come back and say, Well, really, you miscategorized these individuals as subcontractors, and really, they should be employees. You owe back employment taxes, Social Security FICA on their behalf. Oh, well, let's also look at their hours and see if they're entitled to any overtime that perhaps you didn't pay them because they were just being 1099. Or you're paying them $12 an hour. But really, the minimum wage in this state is $15 an hour. So oh, you also owe them back regular wages because you weren't paying them enough. So that can be incredibly costly. And then you get the reputation of bad business person, bad employer. All of the trickle down.
Russ Harlow 24:06
That's just making things right. I mean, if you had done it right from the beginning, you would have all those things. What about penalties and everything else? What comes with that? I mean, I can imagine on top of having to pay all those things you did owe but didn't pay. On top of it. There's got to be some penalties and punishment. There's got to be something punitive, right?
Dana Dowdell 24:25
Oh, yeah, Department of Labor. And certainly the IRS. They don't mess around in terms of assessing penalties and fines for Miss categorizing individuals. And it's it's usually on a case by case basis. I will say in my experience, working with some Wage and Hour issues with clients with the Department of Labor, and this is specific to the state of Connecticut. So just take this with a grain of salt. There's often ways to negotiate kind of like lesser penalties, but I know that I don't want to be paying penalties on things
Russ Harlow 25:01
I know it's bad enough, I gotta pay all the taxes, penalties from when I tried to cheat them.
Dana Dowdell 25:07
Yeah, exactly. I do want to talk about. So there's two kind of ways to look at the relationship, and some questions that you can ask yourself to help assess, you know, is this an employee? Or is this an independent contractor. So one is called the economic reality test. And I also want to mention that each state is different. So some states have specific kind of forms that you can actually download from their Department of Labor website that you can move a position through, and it'll help you to determine whether or not they're an independent contractor or an employee. So this is kind of just general information. But one is called the economic reality test. And there's about seven questions associated with the economic reality test. And so the first thing that you're looking at is, what's the extent to which the services rendered are an integral part of the hiring entity's business? So for your bookkeeper, or let's say they're doing a small sliver of the business, right? Someone who is your employees where they're going to mold remediation jobs, they're an integral part of the business, right? The second part is the permanency of the relationship. You're also looking at what is the investment of the workers? What is the amount of the investment of the worker in facilities and equipment? So are they bringing their own equipment? are they responsible for all of their travel transportation? You're also looking at the hiring entity's nature and degree of control. Again, the control component is a huge part. What's the workers profit for opportunity or loss? So if you lose a job, how does that impact your employees versus your independent contractors, the amount of initiative judgment or foresight in the open market competition with others that is required for the worker success. And then lastly, as part of the economic reality test, the degree of independent business organization and operation on the workers part. So seven different layers to kind of filter through, there's a little bit of an easier task, which is called the ABC test.
Russ Harlow 27:36
Good, because I'm really confused by all those things. You just said to me, I'm not gonna lie.
Dana Dowdell 27:41
It's legal speak, you're basically looking at, you know, what is their potential for profit and loss? Are they bringing their own tools, resources, systems platforms, are you providing them to them, or requiring them to use your own systems, platforms, tools and resources. And the control component is huge. The control component is a huge theme throughout anytime this comes up from a legal standpoint, that control piece is a huge part. So the ABC test this is if you're in California, Illinois, Massachusetts, or New Jersey, those four states have the ABC test requirements, but it's a good kind of an easier filter to run, run something through. So you're looking to see is the worker free from the control and direction of the hiring entity in connection with the performance of the work? So if the worker is free from the control and direction of the hiring entity, they're likely an independent contractor. Okay, so that's the A part absence of control.
Russ Harlow 28:48
So I give my bookkeeper a bunch of stuff she doesn't want ever she wants in the next four weeks. Got it?
Dana Dowdell 28:53
Exactly, exactly. Does the worker perform tasks that are outside the usual course of the hiring entity's business? So what's the business of the worker? So your business is that of mold remediation? If you're a bookkeeper, though, it's an essential part of good business there, that is not your business. Right? Does that make sense?
Russ Harlow 29:17
I think so. Yeah. Yes. So like, I could hire a bookkeeper, I could bring somebody on board and she could, you know, he or she could do bookkeeping accounting. But that'd be a whole different story, because that would be an integral role in my business.
Dana Dowdell 29:34
Well, and when you're looking at these tests, specifically, the ABC test, it's usually they have to hit all three. So the last one is the it's, it stands for customarily engaged, so the worker is customarily engaged in an independently established trade, occupation or business of the same nature as the work being performed. So it goes back to your bookkeeper probably does that work for other types of businesses. So she's he or she is customarily engaged in that task for other businesses.
Russ Harlow 30:11
Right. Or, as an example, if I'm brought in, as a subcontractor to do my specialty work for a general contractor who, exactly I'm engaged in this business elsewhere, but I'm coming in on this project to do specifically this task for them. So I am an independent contractor or subcontractor.
Dana Dowdell 30:35
Exactly. So it's not black and white as nothing is when we talk about business, but you know, the doing it right is really important. And having kind of a general understanding of where you might want to look deeper into a relationship to see are you categorizing them correctly, is really important. And again, it goes back to what we've talked about in previous episodes, that bail team, you know, having a business attorney, having a bank or having insurance, all of those things will help you kind of avoid pitfalls around this topic.
Russ Harlow 31:13
And I think, yeah, it's not just pitfalls, I think you have to start worrying about protecting your business by doing it, right. I mean, if you do it wrong, you're putting your entire livelihood at risk. And you could lose everything. You know, depending on you know, can you afford to pay fines? Can you are you, you know, will this hurt your reputation? I mean, you can't just go bankrupt and start up again.
Dana Dowdell 31:45
I guess you could, but yeah, you know, it's and this this topic of contractors or employees, I don't think that the conversation is done being had, you know, the, when we look at case law, and the cases that have come up around Uber and Lyft. You know, Uber and Lyft have really good attorneys that they can hire to argue their point that no, these drivers are independent contractors. But that may change. You know, it's all it takes is another court case for that to change. So it's constantly being looked at.
Russ Harlow 32:22
It comes up in franchising, also, where you have a franchisor and independent franchisees, there are certain things franchises can't do for their franchisees give them recommendations on, you know, certain employee type, because then all of a sudden, everybody is an employee of the franchisor. And that goes against how that model is set up. So there's a lot of weird things in franchises also, that go along with it.
Dana Dowdell 32:51
This is like a rabbit hole that we could go down, that would not stop. There is kind of a subset of HR, and it's a group employer mindset or group employer, kind of legal structure where if you're doing enough sub contracting work together, and perhaps you're only doing you're the only two businesses that subcontract together, are your employees. Are you viewed as one large employer from the perspective of the Affordable Care Act? Any other Wage and Hour stuff that has to do with you know, a 50? Employee threshold? So, again, it goes back to are you pretending to be a business? Or are you a legitimate business? Have you legitimized your working relationships, whether it's employees, whether it's subcontractors, whether it's independent contractors, are they legitimized?
Russ Harlow 33:54
And I think a situation like that could happen by accident, just totally organically, where you start building and all of a sudden, you're not in compliance, because you know, the nature of your business relationship. And then there's probably some two who might intentionally do that to be skirting different laws on you know, you know, maybe the Affordable Care Act or some other thing where, you know, more than 50 employees, less than 50 employees, whatever it is, but I think more times than not, it probably happens by accident. And then all of a sudden you realize, oops,
Dana Dowdell 34:29
yeah. Yeah. So I hope this was helpful. It probably a little bit confusing, because it's not something that they cover and business school or when you go to register your LLC, they don't tell you this stuff. So again, get a good bail team get a good point of contact to help you work through this stuff.
Russ Harlow 34:53
That's banker, accountant, insurance and lawyer right?
Dana Dowdell 34:57
Yes, I used ili. To say bail dash HR. Okay. But again, that's because I'm biased.
35:06
A Bail-HR enough, kinda like it.
Russ Harlow 35:14
So we're so honestly, we need to at least have somebody like you as a resource, wherever we are that understands our local laws, our state laws and how it affects our business when we're trying to do the right thing with employees and contractors. So I mean, I'm sure it's as easy as a Google search, but at the same time, you just need to find the right folks. And I'm guessing you have a good kind of referral sources. You know, when people contact you say, you know, I know somebody in New York that might be able to help you.
Dana Dowdell 35:52
Yeah, so there's, you know, I am finding, there's a lot more independent contractors that are starting HR consulting businesses. So you could always go that route, where you find an A consultant that can help your business. Also look at employer association groups, because they are often very focused on this type of stuff. So like here in Connecticut, we have CBIA. And they do a really fantastic job highlighting the the legal requirements for employers and businesses around these relationships. So look and see what's your local employer association group, and oftentimes, they offer some type of HR support or, or HR guidance. Also look at your payroll company. Many payroll companies are including some human resources, consulting as part of their services. It tends to be cookie cutter, you know, so they're not necessarily helping you decipher the law. They're just giving you the law and kind of setting you on your way. But oftentimes, that's roped into what you're already paying for payroll if you are running payroll.
Russ Harlow 37:05
Make sense? All right. Well, you've given us a lot to think about. And I think it's important stuff. Because A, we don't want to just play business, we want to be a real business. And this is part of it and understanding the human resources aspect of it, understanding the laws and the rules, you really don't want to tick off the IRS. I'm thinking that's the last thing you want to do. But I want to thank you all for stopping by the podcasts today. figuring out whether it's a 1099 or a W two, you got a little bit of homework to do go out and check it out. See if you can find your local Business Industry Association and see if they can get you some resources. You can reach us on all the places that it's just business podcasts. And remember, it's not personal. It's just business.