May 2016

In any game-changing endeavor, the trailblazers have both the most to gain and the most at stake. Since its start in 2009, Uber, a spearhead in the gig economy, has earned a $62.5 billion valuation and forked out millions in legal settlements due to worker classification missteps. The gig economy and technological advances are redefining business as we know it.

Here are our answers to a few of the questions you need to start asking yourself about setting up independent contractors, hiring employees, and what it all means for the future of your business.

Am I setting up independent contractors or hiring employees?

Nothing worth doing should be too easy—and that certainly applies to set up independent contractors. Mistakes can be costly and generate bad press.

The rule of thumb is that independent contractors have a great deal of say in how, when, and how often they work; but are not entitled to their clients’ company benefits. Generally, employees have fewer freedoms but are entitled to company benefits.

Worker classification is never simple, but we’ve done a whole series on the subject to make it easier for you to be prepared. If you’re still unsure about whether you’re setting up independent contractors or employees, our worker classification quiz can help.

Are there other worker classification twists that I should know about?

For those who don’t fit neatly into one of the two descriptions above, some economists advocate for a “…third category of worker for the gig economy: the ‘independent worker.’ These hands would have the right to organize and would have social-security contributions made on their behalf. But they would not receive the minimum wage or unemployment insurance.” 

The game is changing and it pays to stay abreast of the laws surrounding worker classification, setting up independent contractors, and hiring employees. Don’t have the knowledge or the time to immerse yourself? You know who to call. (Hint: it isn’t The Ghostbusters.)

About PayReel

Producing multimedia content and executing live events is chaotic. At PayReel, we make sure our clients are able to hire who they want when they want and that everyone is paid properly. Leave the details up to the PayReel team so you can focus on pulling off a flawless production. Contact us anytime at 303-526-4900 or by emailing us here.

Relax. We got it.

When you pay contractors quickly, they’re more likely to answer your calls and ramp up your projects in a short amount of time. For busy department heads with big projects and short turnaround times, there’s nothing better than diving right in with tried and true creative partners. Saving time, money, and hassle by working with people who just get what you’re looking for is priceless.

Pay contractors quickly or risk losing them

Internal processes, red tape, and backlogged accounting departments make it hard to get checks in the mail. We definitely understand. Unfortunately, your corporate freelance payment policy might prevent you from working with the best people. Top contractors get booked quickly. Paying them later than your competition can get you blacklisted or moved to the bottom of their long to-do list.

Put yourself in their shoes. Freelancers are single-handedly juggling creative work, billing, marketing, and more. That means the person who sees your invoice in their red column is the same one you’re expecting to bring their all to your next project. What seems like a small invoice to a big company can have a major effect on a small business’s cash flow.

Don’t be a hoarder

According to a Wall Street Journal article, many large companies are “hoarding cash” and “squeezing small businesses” to increase their own bottom lines. Don’t be that guy. Not only does it add pressure to those you work with, but it’s also just not ethical. You may justify it by saying it’s not as bad as Bernie Madoff or Volkswagen‘s illegal and greedy ways, but shady practices of any degree have no place in your business.

Hire someone with systems in place

Paying contractors quickly is worth the investment. If it’s not feasible to transform your internal process, get a partner involved. You get the peace of mind of knowing that you’ll always be in good standing with contractors. With PayReel, you also get the bonus of pre-vetted workers who are always available at a moment’s notice.

Hiring contractors is a beautiful thing: It gives you a fresh perspective and talent without having to bring on full-time team members. Just make sure you do it right. Going from Net 90 to Net Now will save you time, keep you in good standing with contractors, and ensure you can feel good about the way you do business. Rather than trying to save Benjamin’s upfront, take Benjamin Franklin’s advice and “Wrong none by doing injuries, or omitting the benefits that are your duty.”

About PayReel

Producing multimedia content and executing live events is chaotic. At PayReel, we make sure our clients are able to hire who they want when they want and that everyone is paid properly. Leave the details up to the PayReel team so you can focus on pulling off a flawless production. Contact us anytime at 303-526-4900 or by emailing us here.

Relax. We got it.