Need a Peep?

Recruit • Hire • Interview • Train • Manage

Independent Contractor vs. Employee

Buffalo News Sales Team

Differences between independent contractor & employee

Local laws & where to verify them

Bryan Donohue, CFO

Buffalo News Sales Team

Commission only Generalist

Sell all products Provide client relationship management

Provide benefits Earn the right for time off based on years of service

Salary plus commission Specialists

Have an expertise in a certain product area Provide support to generalist to close a sale May bring in new clients and manage that relationship

Independent Contractor vs. Employer

Federal and State Laws may differ

Check both before

classifying a person

Laws are all Different

Google “employee vs independent contractor” IRS website yields federal employment tax law State of Ohio Department of Labor has new rules State of New Hampshire has new rules for 2012 State of New York rules are contradictory

For tax purposes a person can be classified as an independent contractor.

For worker’s compensation purposes that same person can be classified as an employee.

Seek legal advise about your specific circumstance IRS web site State Department of Labor web sites

Federal Tax Law – From IRS.GOV

IRS Summertime Tax Tip 2010-20

As a small business owner you may hire people as independent contractors or as employees. There are rules that will help you determine how to classify the people you hire. This will affect how much you pay in taxes, whether you need to withhold from your workers paychecks and what tax documents you need to file.Here are seven things every business owner should know about hiring people as independent contractors versus hiring them as employees.

The IRS uses three characteristics to determine the relationship between businesses and workers:

1) If you have the right to control or direct not only what is to be done, but also how it is to be done, then your workers are most likely employees.  2) If you can direct or control only the result of the work done -- and not the means and methods of accomplishing the result – then your workers are probably independent contractors.   3) Employers who misclassify workers as independent contractors can end up with substantial tax bills.

Additionally, they can face penalties for failing to pay employment taxes and for failing to file required tax forms. 

Federal tax law from IRS.gov

Workers can avoid higher tax bills and lost benefits if they know their proper status.  Both employers and workers can ask the IRS to make a determination on whether a specific individual is an independent contractor or an employee by filing a Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, with the IRS.

You can learn more about the critical determination of a worker’s status as an Independent Contractor or Employee at IRS.gov by selecting the Small Business link. 

Additional resources include IRS Publication 15-A, Employer's Supplemental Tax Guide, Publication 1779, Independent Contractor or Employee, and Publication 1976, Do You Qualify for Relief under Section 530? These publications and Form SS-8 are available on the IRS website or by calling the IRS at 800-829-3676 (800-TAX-FORM).

Links:Publication 15-A, Employer's Supplemental Tax Guide ( PDF )Publication 1779, Independent Contractor or Employee ( PDF )Publication 1976, Do You Qualify for Relief under Section 530? ( PDF  ) Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding ( PDF )

Compensation

Compensation plans should benefit your employee and your company.

They affect: Your company culture Whether you can attract and retain

employees (from competitors) Whether or not you stay in business

Creative Compensation at Google

On-site massage therapist

Free lunch & snacks

On some campuses, on-site dry cleaning, childcare & dentist

Baby bonus & extra time off

Dollars for education/learning

Travel insurance

Legal aid

Gameroom

Free shuttlebus with wireless to/from work at some locations.

…..& more….

Creative Compensation at Magic City Post

Shop local budget ($250 annually)

3 free logo shirts & 10 logo water bottles

Summer hours

Healthcare stipend

Learning stipend

Game & Fitness in our facility

On-site car wash – 1X per month

Group lunch – every Friday

Favorite snacks in the office fridge – always

$50 grocery gift certificate each month

1X per month – individual activity with each employee

1X per quarter – group retreat

At least 20% of time dedicated to learning

Performance-based Compensation at Magic City Post

1 month sabbatical after 1 yr. of service (must perform at level 3 or above)

Profit sharing (annual bonus)

Reps – go-ahead bonuses

Present on your desk when you do something amazing/or recommend process improvement outside your job scope

Find out what yourCompetition offers…

Robert FuquaCEO

Recruiting “High-Caliber” Employees(from an entrepreneur’s perspective)

Atlas RFID Solutions, LLC

May 16, 2012Birmingham, Alabama

Presentation Purpose & Agenda

One (1) entrepreneur’s experience in recruiting and retaining a “high-caliber” team.

-Define what “high-caliber” means to you.

-Establish your culture that will attract your definition of “high-caliber” professionals.

-Reinforce your culture.-Celebrate culture successes.

-Make the tough decisions.

-Recruit “high-caliber” talent that will be a cultural fit.-(vs. skill sets and experience level).

-Try to scare the recruit away.

Key Tenets:

Presenter’s Qualifications

Academic Performers Relocations to Birmingham

3 West Point graduates1 Princeton graduate

3 Georgia Tech graduates1 Vanderbilt graduate1 Berkeley graduate

2 Duke MBAs2 Emory MBAs

From San Francisco

From Washington D.C.

From Charlotte, NC

From Memphis

From Atlanta (x3)

Corporate Transfers

Arthur Anderson The Shaw Group Novak & Biddle Regions Bank (x2) First Commercial Bank AT&T (x2) Southern Company Blue Cross Blue Shields

Total Hires for Atlas: 47Current Employees: 22

Define “High-Caliber”

Define What “High-Caliber” Means to You.

- How do you size people up?

- How do you measure effectiveness?

- Who impresses you?

- Why do they impress you?

- Where do these people live, work, go to school?

- DOCUMENT YOUR DEFINITION. KEEP IT ON YOUR DESKTOP.

“Seek first to understand; then to be understood”-Stephen Covey

Atlas Case Study

RF Definition of “High-Caliber”:

- Top 1% Intelligence- Articulate; good communicator- Very Strong work ethic- Pattern of achievement under

difficult circumstances- Scrappy problem solvers- Extremely competitive- “Team Player”- Hungry for success

Establish Your Culture

Establish your culture that will attract your definition of “high-caliber” professionals.

- What is important to you in life? Why are you doing this? What is your greater purposes?

- How do you relate to “high-caliber” professionals? When are “high-caliber” professionals impressed by you?

- Figure these things out… Capture in in a document. Save it on your desktop. Post it in your office.

- Commit to these values for the long-term. Learn how to communicate them effectively. Practice communicating these tenets to others.

- A CLEAR UNDERSTANDING OF YOUR VALUES WILL BE THE BASIS OF YOUR CULTURE AND WILL BE THE PRIMARY POINT OF ATTRACTRION TO PROFESSIONAL RECRUITS.

Atlas Case Study

- Culture based upon exceptional global-level achievement.

- Defined Mission and Values in static document called “The Core”.

- Developed analogies that help me to effectively communicate Atlas’ culture and values:

- Special Ops Philosophy- 100% Effort on the

Basketball Court

“Seek first to understand; then to be understood”-Stephen Covey

Reinforce Your Culture

- Establish rules and policies that reinforce the merits of your culture.

- Routinely communicate the tenets of your culture.

- Celebrate successes that come as a result of your culture.

- Make the tough decisions to eliminate threats to your culture.

Atlas Case Study

A higher standard- No detail too small.- “The Tie Guys”

Work ethic- We don’t track time in/out.- We don’t track vacation days.- Huge awareness to customer

comments regarding this.

Tough Decisions:

“Seek first to understand; then to be understood”-Stephen Covey

Recruit “High-Caliber” Talent

Recruit “high-caliber” talent that will be a cultural fit.

- Order of Significance when Hiring:- “High-Caliber” Match?

- Cultural Fit?

- Experience Level.

- Skill Set.

- Try to scare candidates away from your company.

- Never let compensation be the showstopper when you know you have a strong fit!- Identify the specific hurdle.

- Creatively resolve the hurdle with a timeline.

Atlas Case Study

Talent Before Skill Set- Project Manger Sales Guy- Retail Manager Project Manager- Financier Product Manager- Accountant Goodbye

Creative Compensation Models- Relocation- House sell- Equity- Guaranteed commission- Professional training- No travel- Work from home

“Seek first to understand; then to be understood”-Stephen Covey

Summary

TENETS:

- Define what “high-caliber” means to you.

- Establish your culture that will attract your definition of “high-caliber” professionals.

- Reinforce your culture.

- Recruit “high-caliber” talent that will be a cultural fit.

KEY POINTS:

- DOCUMENT YOUR VALUES AND DEFINITIONS. KEEP IT ON YOUR DESKTOP.

- A CLEAR UNDERSTANDING OF YOUR VALUES WILL BE THE BASIS OF YOUR CULTURE AND WILL BE THE PRIMARY POINT OF ATTRACTRION TO PROFESSIONAL RECRUITS.

- REINFORCE YOUR CULTURE DAILY, MAKE THE TOUGH DECISIONS, OR LOSE YOUR TALENTED PROFESSIONALS.

- ALWAYS BE RECRUITING. IT’S YOUR MOST IMPORTANT TASK AS AN ENTREPRENEUR.

“Seek first to understand; then to be understood”-Stephen Covey

Questions?

Recruit

Write job description, and figure out exactly what/who you are looking for. Tell them what’s in it for them.

Network, network, network

Tell everyone you meet at business meetings that you are hiring & the qualities/traits you are looking for

Attend job fairs & follow-up

Always be recruiting…

Alex Papike, VP

Magic City Media, publishers of Magic City Post & ShopBirmingham.com, is looking for a talented Sales Affiliate to join our team. You’ll help local independent businesses learn how to market/advertise online, and you’ll help our team grow and thrive by meeting monthly sales goals. We offer an excellent digital training program along with enhanced, ongoing learning opportunities and a unique culture that supports collaborative decision-making. Magic City Media is a year-old start-up company located in Innovation Depot, a world-class technology incubator in downtown Birmingham. We were recently named ‘Best Local Website’ by readers of the Birmingham News, and our shopping sites are the ‘buy local’ platform for the communities of Homewood and Mountain Brook.

For this role, you must be a curious type – interested in learning something new everyday as you’ll dedicate at least 20% of your time doing just that. You must also be able to perform in a team environment and support your colleagues and the community in a positive, motivational way.

We offer:

A team-based work environment

Performance-based compensation

Monthly grocery stipend & free car washes

Healthcare & fitness stipend

Month-long sabbatical after 1 yr of service

Path to advancement

Interested candidates can connect with us on Linked In or email their resume to:

emily@magiccitypost.com.

Sample Job Posting

Pull: Place job on college job boards (usually free)

Pull: Place job ad on your own website & social media channels

Network: Contact local Professors of Sales & Marketing programs & ask them for their best candidates

Direct: Contact student media at local colleges/universities

Recruit

Interview

Pitch

Cultural fit?

Clear & precise on training program

Follow-up with all candidates

The #1 reason why people leave an organization is because of a values misfit.

Hire

Call to offer position (don’t leave a voice mail with the offer)

Send offer letter immediately with all details Start-date Compensation 90 day trial

Employee should sign/send back

Offer Letter

Dear Susan,

We are pleased to offer you a Sales Affiliate position with Magic City Media.

Your compensation is performance-based, so in addition to your base salary of $10 hourly, you will receive a 20% commission on all sales above your base-level goal each month. Your base-level goal will be given to you prior to the start of the month by me. You will receive your base salary check each Friday and your commission will be paid on the 15th of the month for the previous month’s collected revenue.

You will also receive some fringe benefits that we’ll cover with you in detail on your first day with us. We determine our fringe benefits based on employee feedback, so those could change on a quarter-to-quarter basis, and we look forward to hearing from you on which benefits you find to be most valuable. Mary Neal, our Marketing Coordinator, is a big fan of the grocery stipend right now. She can tell you all about that on your first day with us.

Your offer is contingent on a background check of your references, which will be completed by Friday. You will also be subject to a 90-day probationary period as I described during your interview.

Your start date will be May 1, 2012 at 9:00am or a mutally agreed-upon date.

Please sign and return this document via fax (205-250-9038) or email (emily@magiccitypost.com) to indicate acceptance of the position no later than April 22, 2012 at 5:00pm.

Welcome to the team!

Best, Emily Lowrey

________________________________________ ____________________________________________

Emily Lowrey, CEO Susan Jones

Magic City Media

1st Day

Keep the momentum going from the start.

All forms ready prior to arrival.

Training scheduled prior to arrival.

Goals prepared prior to arrival.

Manage: Snowflake exercise

Three management styles:

1. Laissez-faire Chaos, need for control

2. Autocratic Don’t do anything unless

the leader is here

3. Democratic Participatory decision-

making

Manage: Four phases of employee development

Manage your employees to where they’re at currently, with the goal of getting them to the next stage.

4 Levels of Employee Development

1. Full Direction: They need you to clearly direct them on most everything they do.

2. Half/Half: They can take on some tasks, but still need direction on most.

3. 3/4 -1/4: They can take on most every task, but still come to you for approval.

4. Optimal Performance: They take initiative and own work, making nearly all decisions in their specific area of focus.

Questions