11/ 23/ 2005
Business is picking up and things are looking good, but now your business is no longer a one-person job. It’s time to make the move from solo artist to employer, and you have several options out there. Here are some tips to help you figure out your needs and select the option that best accommodates your small business.
First, let’s take a look at the different types of help you can hire:
Temps: Temporary help is procured through an employment agency. You pay the agency directly, and they pay the employee. The agency will take out taxes and keep track of all paperwork for your hire. While going through a temp agency is more expensive than hiring yourself, it can save you the time it takes to interview, especially since the agency pre-screens candidates for the appropriate skills. This might be a good way to go if your work is seasonal, or you’re unsure of whether you’ll have enough work to hire a part-time employee permanently. Someone working for a temporary agency would be fine with a job lasting three weeks, whereas a part-time employee would expect more job security. If the job turns out to be a mutually beneficial arrangement, you often have the option of hiring the temp.
Part-time: These employees work set hours, usually between 15 and 30 hours a week, and are a good arrangement if you need steady, ongoing assistance. When you claim someone as your employee, you’re responsible for withholding a portion of his or her paycheck for taxes, as well as paying the employer’s share of the Social Security and unemployment taxes on the employee.
Full-time: These employees work 40 hours a week. The same tax rules apply to full-time workers as part-time workers. More often with full-time employees, employers offer a benefits plan. While you aren’t required to offer health or other benefits, doing so makes you a competitive employer who will attract quality help.
Contract workers: Independent workers, also known as freelancers, are usually employed by other businesses as well, and are paid on an hourly or project basis. You pay them the full amount for their work, and they’re responsible for paying the taxes on their income themselves. Service contracting companies are also available for jobs such as payroll or janitorial services.
With all the options available for finding help, there’s no reason to carry the burden of a growing your business alone. However, hiring employees does complicate things. Before taking on help, make sure that you’re well versed in employee rights such as minimum wage and safe workplace requirements. Know any special rules that apply to your industry.
If you opt to do the hiring yourself, you must use anti-discriminatory hiring practices.
Your application may not ask any questions about age, race, religion or country of origin. You may not ask whether the person has any mental or physical disabilities, though you may inquire whether any foreseeable factors might interfere with their ability to do the job.
Finally, check with your accountant to make sure you’re correctly classifying and reporting your employees to the IRS. You’re still responsible for reporting the wages paid to independent contractors. Misclassifying part-time employees as independent contractors will get you in trouble.
If you have all of your bases covered before you begin your hiring process, you’ll make the transition from being on your own to working with a crew much smoother for yourself and all involved.
