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Hire More Staff or Contract Out?


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Hire More Staff or Contract Out?

  1. 1. presents… Hire More Staff or Contract Out?A Question for Every Small Business Brought to you by
  2. 2. How to Participate• Submit your questions in the GotoWebinar presentation window• Follow along and share your thoughts on Twitter at #MVPlive
  3. 3. About the Moderator Robin Fray Carey is the co-founder and CEO of Social Media Today, LLC, a blogging network that assembles the world’s best thinkers on business and public policy. Carey launched Social Media Today in 2007 with the goal of connecting leading experts across a variety of business conversations. As traditional media went digital, and the Internet went social, Carey realized the huge potential for social media platforms to facilitate direct communication among customers, their employees, and experts from academia, business and government. Robin speaks on social media around the world, and blogs at She has volunteered as a board member of the Women’s Refugee Commission, which she now co-chairs. She is also an advisor to the Society for New Communications Research, and a member of the Overseers of the International Rescue Committee. These communities have attracted over 100,000 registered members and over half a million monthly visits. Social Media Today’s advertising roster includes Fortune 500 companies like DuPont, SAP, Siemens and Microsoft. Carey also serves the non-profit world, offering expertise and leadership as the co-chair of the Womens Refugee Commission, member of the International Rescue Committee Board of Overseers, and Business Advisor to the Society for New Communications Research. Ms. Carey graduated with distinction from the University of Virginia, where she was an Echols Scholar.
  4. 4. About the PanelDavid BranchDavid Branch brings more than 17 years of Staffing & Human Capital Management experience to ICon® Professional Services. As theVice President of Business Strategies, he is responsible for developing client services and expanding ICons product offering around theclassification and management of independent contractors.Jennifer MarionJennifer Marion is the Senior Advisor in the Office of the Administrator, Wage & Hour Division, U.S. Department of Labor, in Washington,D.C. As the Senior Advisor, she is responsible for a wide range of activities related to policy development, analysis, and implementation,with a particular focus on issues relating to immigration and the misclassification of employees.Elizabeth MilitoElizabeth Milito serves as Senior Executive Counsel with the National Federation of Independent Business (NFIB) Small Business LegalCenter, a position she has held since March 2004. Ms. Milito is responsible for managing cases and legal work for the Legal Center. Shefrequently counsels businesses facing employment discrimination charges, wage and hour claims, wrongful termination lawsuits, unionavoidance and, and in most other areas of human resources law. She also provides and develops on-line and on-site training on a varietyof employment law matters and is a frequent media spokesperson on employment and labor matters.Dale JensenDale Jensen is an attorney with the Zobrist Law Group located in Charlottesville Virginia. Mr. Jensen specializes in employment law,intellectual property law and litigation. Mr. Jensen and the Zobrist Law Group counsel numerous business clients of various sizes inemployment law matters.
  5. 5. April, 26 2012Hire More Staff or Contract Out?A Question for Every Small Business - Webinar
  6. 6. Hire More Staff or Contract Out?A Question for Every Small Business Elizabeth Milito Senior Executive Counsel NFIB Small Business Legal Center
  7. 7. The Perfect Storm1. Higher unemployment means more lawsuits.2. Individuals are more aware of their rights.3. Emphasis on enforcement.
  8. 8. State of the NationDOL estimates 70 percent of employers are out of compliance on wage and hour issues.
  9. 9. Don’t Get it Wrong• Incorrect classification: – IRS actively pursues companies that misclassify workers. – State revenue agencies will come calling. – Liability for workers’ compensation costs and unpaid overtime.
  10. 10. Independent ContractorsMinimize Risk – Conduct regular reviews of Independent Contractor (1099) Classifications – Consider how much control your business has over Independent Contractors: Is the individual generally told (1) when, where, and how to work, (2) what tools or equipment to use, (3) what workers to hire or to assist with the work, (4) where to purchase supplies and services, (4) that work must be performed by a specified individual, and (5) what order or sequence to follow?
  11. 11. Independent ContractorsMinimize Risk – Require documentation to establish that the consultant is truly an independent contractor, such as business cards, licenses, and certificate of insurance – Put your agreement in writing – set forth the terms of your relationship with a consultant to show the IRS and state agencies that the consultant is an independent contractor – Do not treat contractors like employees
  12. 12. Dale JensenAttorney at Law
  13. 13. Hiring EmployeesAn employee is a person who works in the service of another personunder an express or implied contract of hire, under which theemployer has the right to control the details of work performance. When you hire an employee, the advantages are: being able to completely control and direct that persons work during work time;  to train the person in the way you want the job done; to require that person to work only for you; and typically more loyalty and team spirit than contractors.When you hire an employee, the disadvantages are: requirements to comply with many laws and regulations (e.g., laws regarding wages, overtime, work rules, unemployment insurance, worker’s compensation insurance, and payroll tax requirements, including paying half of the FICA taxes); and typically more difficult psychologically to terminate relationship.
  14. 14. If You Decide To Hire ContractorMake sure to have a written contract that thoroughly andunambiguously establishes the relationship with the contractorincluding payments and provisions for terminating relationship. Consider only contracting with a corporate entity (e.g., an LLC): governmental entities typically have some form of multi-factor test for determining whether someone is an employee or contractor, which can result in unexpected negative consequences if someone you intended to be a contractor is determined to be an employee;  if you contract with a corporate entity, a governmental entity will typically have to get a court to pierce the corporate veil, which typically requires some form of fraud or failure to observe proper formalities – this is typically more difficult for the governmentally entity to do than simply showing that an individual is an employee rather than a contractor.
  15. 15. Thank you! For more information about theNFIB Small Business Legal Center contact: or 202-406-4443
  16. 16. Thank you to our sponsor…Visit the TriNet Hub on for free articles, podcasts, whitepapers and on-demand webinars focusing on HR and human capital management
  17. 17. Thanks for Joining Us• This webinar will be available on-demand at Stop by to learn more and share your comments.• Connect with our panelists on MyVenturePad using the search function: