The gig economy: How to pay contractors and navigate benefits

The gig economy offers benefits to workers and companies alike. While those benefits do include flexibility for workers and lower costs to employers, they don’t cover things we’ve grown used to such as built-in 401K plans, health insurance options, and worker’s compensation. For many independent contractors, that’s a problem. And as the gig economy’s slice of the economic pie grows, so does the problem. Currently, there is no roadmap telling you how to pay contractors fairly while keeping costs down. The good news is that we at PayReel have been on this road long enough to learn how to pay contractors legally and ethically.

 

Start with worker classification

First things first: classify workers correctly from the outset. A worker’s classification (whether they’re an employee or an independent contractor) guides what freelance benefits they’re entitled to by law. The rise of the gig economy has brought with it the rise of confusion over who is an employee and who is a contractor. Wherever gray areas and money meet, you will find lawsuits. True to form, legal disputes over worker classification have plagued everyone from Uber to FedEx. Following the rules and classifying correctly from the beginning saves time and potential legal troubles.

 

Stay aware of potential legal changes

From workers to legislators, people are thinking about how to manage the evolving landscape. Some envision an entirely new system with changing guidelines that suit changing times. Such a system might include “portable benefits” that travel with workers from company to company.

According to this article from the Pew Charitable Trusts, one bill proposes to:

“require people or companies that find work for and transfer payments to independent contractors — Uber, say, or a middleman who works with farm laborers — to contribute to a pool of money managed by an independent nonprofit. The broker might do that by charging consumers extra or by taking the money out of workers’ pay.

Contributions would be made at least monthly and would have to amount to either $6 per hour worked or 25 percent of the sum charged to the consumer, whichever is smaller. The money could be spent on paid time off, health insurance or other qualified benefits.”

We can only guess how things will change, but we do expect them to change. It behooves company leaders to stay in tune with these kinds of conversations and legal considerations.

 

Consider more than the bottom line

Some companies aren’t waiting for a legal mandate to make changes. Instead, they are voluntarily providing freelance benefits beyond their legal requirements. Care.com, for example, adds a small fee to each transaction, which converts to “benefits bucks” that service providers may use for expenses such as transportation. This kind of perk goes beyond the money in a worker’s pocket. Workers who feel valued are more loyal and do better work.  

 

Protect yourself

If you can’t (or just don’t want to) keep up with the rules and developments surrounding the on-demand economy, PayReel can keep up for you. Check out this handy guide to see if you might benefit from hiring a payroll services company. Not only does our team manage worker classification, payroll, and payroll taxes; as the employer of record we even take on all risk associated with a variable workforce. Going above and beyond in the ethics department isn’t just a warm and fuzzy notion. It’s a sound business decision, too.

 

About PayReel

When it comes to payroll taxes and so much more, PayReel makes your life easier. 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 all payroll services and 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.

 

What do Trump’s first 100 days mean for the on-demand economy?

 

If anything’s certain, it’s that very little is certain when it comes to the rumors and grand plans that often surround any President’s first 100 days in office.

Worker classification was a major focus during President Obama’s administration, which resulted in a rash of highly-publicized lawsuits and debates across the U.S. just as the the on-demand economy was coming of age.

The Trump administration’s focus on that same unique issue might actually play out favorably this time around for employers who rely on independent contractors. But before you throw all your paperwork out the window—that doesn’t mean classification is going out the window, too. In fact, some states and localities might even tighten restrictions and increase punishments for misclassification in response to relaxed federal law.

In short, things are as up in the air as ever when it comes to federal government trying to keep up with rapid developments in the on-demand economy.

Here’s what to do while you wait to see what President Trump’s first 100 days mean for the on-demand economy.

 

Be vigilant when it comes to compliance

Federal, state, and local regulations already change regularly; who knows how things could fluctuate as the government tries to get a grasp on how benefits, taxes, and everything else could and should shift as workforces get more and more nontraditional.

 

Don’t slack on classification

The process of classification might eventually get easier, but it’s not likely to go away. If the current situation is any indication, it could even get a bit hairier for some states and localities as they react to uncertain or lax laws at the federal level.

 

The bottom line:

If you can’t (or just don’t want to) keep up with the rules and developments surrounding the on-demand economy—PayReel can keep up for you. Not only does our team manage worker classification, payroll, and payroll taxes; as the employer of record we even take on all risk associated with a variable workforce.

 


 

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 all payroll services and 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.

 

DOL drops the hammer on worker classification

 

If you’ve been paying attention to labor law (or more specifically worker classification) in the news or the grumbles of your last Uber driver, you may know that the on-demand driver provider is facing a three-headed monster. It’s not stoplights, stop signs, and lane changes—instead, it’s a mess of more than 70 federal lawsuits against Uber from drivers, passengers, and even the government.

What brought it all on? To start, Uber has classified their drivers (both full and part time) as contractors, while drivers feel that they’re treated as employees. As things stand today, those drivers are correct—they are employees. That decision has cost Uber $100 million in a settlement in both California and Massachusetts. More settlements and lawsuits are still pending.

The difference between W-2 employees and 1099 independent contractors occupies a grey area. This grey area has become the target of a Department of Labor crackdown. The DOL is dropping the hammer and strengthening their enforcement of worker classification. If they’re not careful, companies could face lawsuits from many angles. If Uber is any indication, that’s not likely to turn out very well.

 

The bottom line

At PayReel, compliance comes first. We don’t just classify your employees properly, we even pay them properly so that you can hire who you want exactly when you want them. If grey areas aren’t your thing and if the term “lawsuit” makes your heart skip a beat—relax, we got it. Contact us around the clock at 303-526-4900 or email us here.

 


 
Nat's notes

About the author

PayReel Customer Experience Manager Natalie “The Go Getter” McGinnis recapped 2016’s biggest news in freelancer management to help you prepare for 2017. Nat’s experience in recruitment and customer service set her up for success in providing laser-focused attention and assistance to the PayReel employees and clients who need it the most. Click here to read more of Nat’s Notes and meet the rest of the PayReel team by clicking here!

 

How to pay temp employees and freelancers fairly and accurately

 

According to a study by Princeton University, 95% of the 10 million new jobs added during President Obama’s terms were temporary or part time. Unfortunately, the reality for many such workers is difficult. Often, they lack access to benefits, work overtime without corresponding compensation, and deal with clients who pay late or don’t pay at all.

On the other end, employers often have a difficult time keeping up with contractor and freelancer management. Staying on top of ever-evolving laws, minimum wage and overtime changes, benefits eligibility, and the differences between state and local regulations is time consuming. It is a worthwhile investment, though. It raises businesses to preferred client status among contract workers and helps protect them from costly fines, to boot.

If you’re wondering how to pay temp employees and freelancers fairly and accurately, we can help.

 

How to pay temp employees and freelancers accurately and fairly

Accurate worker classification is an essential starting place. It’s easy to get wrong, but with your reputation and large fines on the line, it’s also important to get it right. Here’s a list of the most common classification errors and how to avoid them. Here are some basic guidelines for identifying the difference between employees and independent contractors.

Pay accurately and on time. Some big companies make a habit of net 90, but we don’t recommend it. Net 30 is more ethical and ultimately better for business. Here’s whyThe dust hasn’t settled on new overtime regulations or minimum wage debates, but here are our suggestions on this front.

Be proactive about benefits and keep up with evolving state and local laws rather than waiting for workers to knock on your door. Transparency is a great way to build trust. 

 

The bottom line:

We know you care about your freelancers, but they only know it if you show it. Taking these measures makes sure you handle your freelancers in a way that is ethical, shows your appreciation, and keeps you compliant.

We know you’re busy. If you don’t have the time, resources, or desire to pay attention to all the details, hire an expert to keep track of contractor and freelancer management for you. Our team of experts and our PayReel OnLine software are fully equipped to help you sort out the rules and execute processes while also balancing contractor expectations, legalities, and company budgets. This quiz can help you decide if you’d benefit from hiring a team like PayReel 

We help you care about your workers even when you’re short on time. We think happy workers and peace of mind are pretty close to priceless. 

 

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.

 

Contractor payroll, overtime exemptions, and what Volkswagen’s scandal teaches us

 

Heads up: The way the production industry has traditionally approached contractor payroll just isn’t going to cut it anymore. Though currently stalled, new overtime regulations are questioning outdated payment practices—including day rates in the production industry.

Wherever you find new guidelines radically changing previously-accepted practices, you will also find someone trying to get around them. But it behooves companies to be ahead of the guidelines instead of trying to work around them. Just ask Volkswagen.

For its shady dealings (which the BBC broke down here), Volkswagen is paying the price to the tune of $20 billion—one of the most expensive corporate payouts in United States’ history. But it’s not all about the money. While the circumstances differ, the production industry can learn a few lessons from Volkswagen’s scandal about how to walk above board and avoid ending up in court.

 

Culture is everything, and it’s about to shift for the production industry

Martin Winterkorn, Volkswagen’s then CEO, implicated “the terrible mistakes of a few” in his apology. But a scandal so deep doesn’t happen without a company culture (hello, Supervisor B!), and a broader auto industry culture, that tolerates or encourages finding a way around the rules.

A New York Times article points to the cultural element in industries that traditionally require long hours—like video production—that has always made room for fudging paperwork. Companies negotiate a flat rate and contractors work as long as it takes, even up to 12 or more hours, to get the job done. Since it’s standard practice, submitting time sheets that read “9-5” when everyone knows it was actually 9-9 hasn’t necessarily seemed unethical or unfair to either party. That’s just the way it is. Or at least the way it has been.

The new proposed regulations make it clear that even when workers claim to be okay with not getting paid accurately, it’s not actually okay. Employers must be prepared for the culture to shift and for workers to start questioning their overtime eligibility.

 

When the press talks, the people talk…

There’s nothing that shifts culture more than attention. As laws change at the state level and contractors and workers start thinking “this relates to me,” there will be pushback against industry norms. And it’s not just the workers. The media love to find and expose wrongdoings. Nobody wants to be the center of the biggest scandal of the year. Once again, just ask Volkswagen.

A mutual expectation of a flat rate for an undetermined number of work hours doesn’t count as compliance. Duties and level of pay dictate whether or not someone is eligible for overtime, not tradition. The more the press highlights these points, the more the people talk. And the more the people talk, the more the wink and nod approach in the video production industry will come under scrutiny.

 

…and money always talks

The air is dirtier, the ozone is thinner, and consumer trust is shattered. Unfortunately, Volkswagen isn’t the only company bending the rules or blatantly cheating in order to make a buck. Theirs is a tale as old as time. They just got caught.

And it’s coming to our industry too—the same New York Times article states that Fox is in litigation with a former worker who alleges he was paid unfairly. Once a studio gets shut down with a class action lawsuit, everyone will suddenly tighten up their practices and fall in line. But why risk finding yourself at the defense table in a courtroom? It’s not the amount of money that makes it relevant to our industry, it’s the fact that people are paying attention to it.

Don’t be the Volkswagen of the media production industry. It’s going to happen to someone. Why gamble your business instead of just starting to recognize eventual changes to overtime regulations now?

 

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.

 

How 2016’s overtime exemptions, minimum wage, and more will affect 2017

The ball has dropped and the confetti has settled. Now that we’re back to work, let’s talk about what changed—other than the year—when the clock struck midnight on Dec. 31, 2016.

 

Minimum wage

As of Jan. 2017, if you have employees working in one of the 29 states (plus Washington, D.C.) that passed a new minimum wage standard, they may be automatically eligible for a raise. Additionally, if your employees are working in one of the states that passed a built-in yearly minimum wage increase, they’re automatically set up for a raise until 2020. These raises don’t require a performance review and, if they aren’t honored, you could be liable for a lawsuit that’s sure to induce a headache worse than your New Year’s Eve escapades. That’s where PayReel’s smart software (and team!) comes in to make sure compliance comes first even in the most unique cases.

 

Paid sick leave

Some states are not only increasing their minimum wages; they’re also enacting a paid sick leave law. While it varies from location to location, paid sick leave essentially allows eligible employees to take paid time away from work so they or a family member can receive preventive care and/or diagnosis and care of an existing condition. As of Jan. 2017, California, Connecticut, Massachusetts, Oregon, District of Columbia, and Vermont have enacted paid sick leave policies statewide. Certain counties and cities in New Jersey, Washington, New York, and Maryland also have paid sick leave for eligible employees. We’ll be keeping our eyes on paid sick leave laws because, like many things when it comes to managing contractors and freelancers, they’re likely to change and grow as the year goes on. 

 

Mileage rates

In a nutshell: You’ll be paying your freelancers less for the miles they drive on the clock in 2017.

As of Jan. 1, 2017, the standard mileage rates paid to freelancers using their personal vehicle for business purposes decreased from 2016. You can now expect to pay 53.5 cents per mile driven for business purposes (down from 54 cents in 2016) and 17 cents per mile driven for medical or moving purposes (down from 19 cents for 2016). Click here to dig into the details and find our how to take advantage of your mileage savings.

 

Overtime exemptions

One of the most impactful changes of 2017 is sure to be overtime exemptions. That is, if they ever actually happen.

The Department of Labor’s Fair Labor Standards Act (DOL FLSA) is poised to doubled the salary threshold; making over 4 million more employees non-exempt, and therefore eligible for overtime. Click here to learn how an overtime exemption overhaul can still affect you and your bottom line even while it’s in limbo.

 

The bottom line

If all those names, numbers, and abbreviations make you want to pour yourself another glass of champagne, get in touch with the PayReel team. Hire who you want, when you want while we manage all the paperwork and the risk. Contact us around the clock by calling 303-526-4900 or emailing us here.

Relax. We got it!

 


 
Nat's notes

About the author

PayReel Customer Experience Manager Natalie “The Go Getter” McGinnis recapped 2016’s biggest news in freelancer management to help you prepare for 2017. Nat’s experience in recruitment and customer service set her up for success in providing laser-focused attention and assistance to the PayReel employees and clients who need it the most. Click here to read more of Nat’s Notes and meet the rest of the PayReel team by clicking here!


Paying non-exempt employees after the minimum wage increase

 

One hotly-contested topic this election year has been minimum wage increase. While we still don’t know exactly how federal minimum wage will be affected once our new president takes office; what we have right now is a mashup of  states who are implementing gradual increases, several whose increases depend on a litany of caveats, and a few who are holding steady at or near their current local minimum wage.

If you’re paying employees in one of the 29 states that recently passed the minimum wage increase, you may be wondering—what does a local minimum wage increase look like?

If you’re anything like I was before I started at PayReel, the fact that there are both federal and local minimum wages is likely confusing. While some states (like Wyoming and Georgia) have minimum wages lower than the federal minimum wage, the federal minimum wage sets the benchmark.

Since July 2009, the federal minimum wage has been set at $7.25 per hour for non-exempt employees. This means that if your employees are working in the United States, and are eligible to receive overtime, you are going to be paying them a minimum of $7.25 per hour. But wait, there’s more! If your employee is working in a state that has a minimum wage set above the federal limit (there will be 29 such states, as well as Washington, D.C., on January 1, 2017), they must be paid that wage. For example, if your employee works in Washington, D.C., and lives in Virginia – you must pay them the minimum wage in Washington, D.C.

Paying non-exempt employees after federal and local minimum wage increases is only bound to get more confusing. Luckily, at PayReel we eat, sleep, and breathe compliance and have already updated our software to handle changing minimum wage rates.

If you want your business to stay complaint (read: avoid back taxes, keep your livelihood, and stay out of jail!), we always recommend reviewing your payroll practices around the first of the year. If you find yourself in over your head, get in touch with PayReel at 303-526-4900 or shoot us an email by clicking here.

We’re happy to help you hire who you want, when you want while keeping your compliant and your workers paid.

 


 
Nat's notes

About the author

PayReel Customer Experience Manager Natalie “The Go Getter” McGinnis recapped 2016’s biggest news in freelancer management to help you prepare for 2017. Nat’s experience in recruitment and customer service set her up for success in providing laser-focused attention and assistance to the PayReel employees and clients who need it the most. Click here to read more of Nat’s Notes and meet the rest of the PayReel team by clicking here!

 

Payrolling freelancers? Here are 4 ways to be ready for new overtime rules.

 

The Department of Labor’s Fair Labor Standards Act (FSLA) will make about 4 million more workers eligible for overtime on December 1st, 2016. With 21 states suing to end the act altogether, some businesses may be hoping it all just goes away before they have to make changes. But waiting is risky. Getting ready for upcoming changes now ensures companies stay in good standing with employees and the government, too.

 

Four ways to prepare for payrolling contract employees in light of new rules

 

1. Provide a daily guarantee for a pre-negotiated flat rate for contractors. Budget for overtime if applicable.

2. Start tracking time accurately. Businesses and contractors using obligatory, inaccurate timecards need time to adjust to new processes.

3. Classify workers correctly up front. This is a big one because it sets you up for success. In fact, you can read a whole slew of advice on the topic by clicking here.

4. Read our previous posts on what the Volkswagon scandal teaches us about the FSLA and payrolling and four ways to prepare for changes to contractor payroll.

 

The production industry must adapt to remain competitive. And it may wreak havoc on some budgets in the short term. But this whole thing goes beyond the numbers. Companies that treat people fairly attract high quality workers. And when people feel valued, they go above and beyond. Proactive compliance is good business.

 

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.

 

Ten questions to help you decide if you really need to pay for payroll services

Time is money. And when you have a tendency to get buried under onboarding, vendor payment, classifying temporary employees, and other hiring details, time is priceless. Here’s a brief quiz to determine if hiring someone to handle your payroll services might be worth the investment.

 

Do you regularly hire independent contractors and/or temporary employees?

 

Is said hiring and onboarding one of the most time-consuming parts of your role?

 

Do old school payment processes or corporate legal concerns cause frustrating bottlenecks?

 

Is your desk/desktop cluttered with binders, folders, and paperwork?

 

Have you ever made a contacting mis-hire because of a time crunch?

 

Do you get pulled into fighting payrolling fires at least once a month?

 

Would a high level of service free you up to focus on other aspects of business?

 

Do concerns about compliance, worker classification, IRS audits, and workforce headcount keep you up at night?

 

Have you ever lost favor with one of your best contractors by paying late?

 

Do you have a reputation among contractors for paying late?

 

Not everyone needs a service like PayReel (especially startups and small businesses), but if your blood pressure went up as you read the list above, you might need PayReel. For those who need quick/frequent access to qualified contractors or who want to take all the risk out of dealing with the independent workforce, PayReel is a headache free solution. PayReel’s independent workforce engagement solutions makes classifying, onboarding, and paying your freelancers painless, paperless, and personalized. It’s about time.

 

PayReel’s clients, who are some of the biggest companies in the world, are constantly immersed in the chaos of producing multimedia content or executing live events. PayReel makes sure they have the right contractors at the right time in the right place, and that everyone gets paid properly. And, most importantly, they handle every last detail perfectly while making sure their clients think nothing of it. Relax. We got it.

Best Insurance For Temporary Employees? Prevention

When staffing special events or hiring freelance video crews for one-off projects, temporary workers are an incomparable asset. As a special breed, they also require special attention on everything from worker classification to the Affordable Care Act. Protecting these workers, who often spend extended time outdoors, requires a little extra forethought and attention, too. When it comes to keeping them safe, happy, and productive, the best insurance for temporary employees is accident and illness prevention.

July and August are some of the hottest months of the year in much of the U.S. By taking the following precautions against heat-related issues, businesses can lower safety risks and prevent fines and lawsuits, too:

  1. Provide water, rest, and shade: It’s easy to get into a project and forget about the time. Sometimes proactive measures like mandatory breaks with plenty of hydration will remind people to take care of themselves in the heat.
  2. Recognize the signs: Managers should be on high alert for symptoms of heat exhaustion. According to the Occupational Safety and Hazard Administration (OSHA), “Persons suffering from heat exhaustion might have cool, moist skin; sweat heavily; or complain of headache, nausea or lightheadedness.”
  3. Know and respect workers’ rights: It’s not just about staying compliant with the letter of the law, but about understanding and staying true to the spirit behind it. Even if you can push temporary employees a little further to get the job done faster, it’s worth going above and beyond to provide a safe environment. OSHA offers free on-site consultation services to help diligent employers eliminate any problems up front. Contact them at 1-800-321-OSHA for more information.
  4. Download the app: At different temperatures and conditions, different measures are appropriate. The U.S. Department of Labor makes it as easy as possible to monitor the heat index as well as its associated with its heat safety app. You can also schedule reminders for water breaks and more with a few taps.

Staying compliant with OSHA’s guidelines on Occupational Heat Exposure prevents workers from getting heat related illness. It also prevents them from missing work and you from getting fined. Keep everyone safe so neither you nor your employees end up paying the price.

Prevention is great, but actual insurance for temporary employees is still a must. You don’t need to spend hours translating all the legalese. We’ve already done it and know just what businesses need to do to stay compliant with insurance regulations. PayReel eliminates guesswork and frees you up to get you back to doing the creative work you love.  Click here to speak to us! 

About PayReel:

PayReel’s clients, who are some of the biggest companies in the world, are constantly immersed in the chaos of producing multimedia content or executing live events. PayReel makes sure they have the right contractors at the right time in the right place, and that everyone gets paid properly. And, most importantly, they handle every last detail—down to insurance for temporary employees—perfectly while making sure their clients think nothing of it, so they can get back to doing what they do best.