Hiring First IC(Independent Contractor) or Employee
  • dogwalkerdogwalker
    I realize that there is a category labeled "employees", but for whatever reason I was more drawn to post in the legal/professional/accounting category. If only I could post in both categories!

    Moving on:
    I have been operating my dog walking business for nearly three years now. While I reevaluate my business each month, I have always opted to become more selective about the business I take on instead of hiring additional help. I don't regret this decision, as I prefer to keep my business small and personal, with high quality clients with whom I enjoy working.

    This has worked fine thus far, however when a promising candidate contacts me looking for work, I begin to think that it very well might be nice to have someone to fill in on the days when I am sick or on vacation. Up until now, my policy has been to refer out to another qualified professional pet sitter in town who can fill in for my clients on those days when I am out of town. However, my clients (who are mostly mid-day dog walk clients) often opt to either go without or they simply get a neighbor or family member to fill in for a day or two while I am out of town, instead of going through the hassle & paperwork of hiring a new sitter.

    The last time I thought of taking on additional help, I was leaning toward hiring an employee. When I mentioned this to folks, everyone encouraged me to consider just taking on an IC. Now that I'm considering hiring someone as an IC, folks are saying "careful, careful...make sure that IC isn't really an employee."

    So, I am reminded of why I have continually decided against hiring additional help up until this point, but I am eager to hear if anyone has any words of wisdom or positive experiences taking on their first additional employee or Independent Contractor.
  • Pet+Sitter+BiblePet Sitter Bible
    re.: I prefer to keep my business small and personal, with high quality clients with whom I enjoy working

    I love hearing this and I feel the same way but I feel you can maintain this quality of service with those you hire. It was a tough transition for me upon hiring people for the same fears you have but I did grow to realize that if I could train me walkers and sitters to walk close as professionally as me there would be a lot more pets out there receiving great service than before.

    Now to your main topic of ic's vs employees I'll say this - if the IRS wants to find a reason to say your walkers and sitters are actually employees and not ic's they are going to. It's close to impossible to run your pet service, especially when you're concerned about quality without breaking some of the IRS's guidelines to ic's. Also keep in mind if the IRS does charge you with back taxes for ic's you not only owe your percentage of owed payroll tax BUT YOU MUST ALSO PAY THE WALKER'S AND SITTER'S SIDE TOO!!! That could be a lethal blow.

    So in a nut shell with ic's you make more money, the ic's "think" they make more money but actually don't and you are always at risk of the IRS coming down on you. Plus with ic's you need to be careful about telling them how to do their job, that doesn't seem to fit with your goal of professional service right? With employees you'll need to make sure your price point is high enough to still make a profit but you can direct the walker's to do the job as you ask them, you can sleep at night not worrying about the IRS and if you ever decide to sell your company you will be much more desirable to a business person if you are a corporation/llc and have employees, not ic's. Hope that helps, it's just my opinion but I started with ic's and changed to employees so I can speak to both sides - it's also very hard to make that transition later so I suggest you research the issue more now and stick with your decision.

    PS: what's a prime way to run into problem if your walkers and sitters are ic's? If you fire one and they go to claim unemployment benefits....

    PPS: no matter what you decide to do I would 100% get workers' comp and disability insurance
  • annieannie
    If you have IC's how can you purchase worker's compensation and/or disability insurance. I thought you could only do that with employees? Thank you.
  • Pet+Sitter+BiblePet Sitter Bible
    Hi Annie, I was instructed by my accountant I should have workers' comp and disability no matter what my employees were classified. It's there to help your walkers' and sitters if they get hurt but it's also there to help protect you if they sue you because of this, now or years from now. I'd ask a lawyer or accountant further about this but I could see there being complications if you classify your workers as ic's and yet the IRS deems them employees, etc. Hope that helps and I think it would be a very worthwhile investment to protect yourself if you're able to purchase it in your state.
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