When I first set off on my own, I got a job at an insurance agency. I was young and unaware of what the terms 1099 and W-2 meant. At this insurance agency, I went into the office every day, worked a schedule that was set by my boss, and did not receive benefits. When tax season rolled around my dad offered to help me complete my taxes. Overjoyed, I sent him the paperwork I had received from my employer the week before the dreaded Tax Day. And then I got the Dad call… Apparently, for the past year, my boss had me as a 1099 which messed up my taxes and I ended up owing the IRS money. So, let’s talk about the rights and wrongs of the controversial hiring topic.
Save Money, Give Up Control
When you classify someone in your company as a contractor it saves you from providing benefits, dealing with unemployment, paying taxes, and more. It is nice to save some money especially because payroll can get expensive. Is it worth it? Legally, if you put someone in your company as a 1099, they have more freedom. They can make their own schedule, work wherever they want, and work for others including your competition. All of these on their own do not seem so bad but put them together… They might decide to work different hours from you or just not work at all, and they can take your company information and provide it to their other clients AKA your competition. Is it worth the risk?
Think About Morals
Think about how you would feel if you were being paid like a contractor but treated as an employee. If you are like every other working American then you would not be thrilled. Would you like it if your customer paid you less yet demanded things from you daily?
Agency VA is Changing the Game
Here at Agency VA, we pride ourselves on treating and paying employees correctly. Treating our employees like the real people they are is what has helped our business be successful. Working hand in hand with Agency VA helps more people be hired and treated how they deserve. Many of our customers come to us because we take on the burden of legal establishment and payment of employment taxes with local and federal governments. At the same time, we manage the day-to-day operation of your employees to confirm their time card is accurate. Ensuring compliance with employment laws in their area is also critical thus we have legal counsel to represent us in that jurisdiction.
Overall, it is up to you how you classify your workers. It is important to think about the pros and cons before a decision is made. How is your business set up?