These days, all different types of businesses are providing jobs not just to full or part-time employees, but also to other contributors. The different ways that modern people make money are quite diverse with gig workers, contractors, seasonal workers, and those that volunteer their time and services. Business owners in California are required to properly classify the various types of people who support the operation. There are pros and cons when considering the capacity of what the jobs you have to offer to require. Ultimately, the business owner has to make the determination of what mix of people will benefit their business the most.
After you establish the types of services you need to keep your business running, those that are working for you will be paid depending on their classification. The classification that you apply will also dictate, by law, if the person is entitled to benefits and if they have to handle their taxes themself. If you are not sure about your staffing needs, how to classify workers, and what comes with the classification, then speaking with a California employee relations attorney is a good idea.
The Do’s and Dont’s of Classifying Workers in California
Putting a worker in the right category is not always clear and can, understandably, confuse a California business owner. The following tips may help you better navigate the classification process:
- Independent contractors are attractive because as a business owner, you can only pay for the services you need when you need them. Not to mention, you are only responsible for paying them for their services, not benefits and taxes. However, if you develop a contract that indicates a person is an independent contractor but they perform their services as a regular full or part-time employee would then the IRS is going to expect that they are paid as such. For example, the employee may report to your office each day during a specific time frame and uses all of your office’s supplies and equipment, this likely won’t be considered a true independent contractor.
- When considering payment for services from a true independent contractor, paying a higher hourly rate than you would an actual employee that functions in a similar capacity is good practice. This extra bit of money accounts for the benefits that they are not being paid as well as the taxes they have to take on by themself.
- When you write up a job, take the time to truly understand what you want and need out of the position. If you mistakenly classify an employee as something that is not the way they function in terms of their job responsibilities you may be at risk of a California employment lawsuit.
Speak with a California Business Attorney Today
To protect your best interests and ensure that you are staying within the bounds of California’s business laws, the Los Angeles employee relations attorneys at Leiva Law can help. Should you realize that you have misclassified a worker, taking quick action to fix the mistake is recommended. The Los Angeles business litigation attorneys at Leiva Law can also provide legal guidance on this too. To schedule your free consultation with Leiva Law please call (818) 519-4465.
