Independent Contractor vs Employee - Need some advice

Hi everyone! Need some advice. My employer is talking about having us go to independent contractors instead of employees. This isn't something I have any experience with so I would love some input on the pros/cons of both. I'm currently an employee. Being an IC would mean I would be responsible for all my own equipment, products, supplies, business cards, brochures, marketing, etc. We are currently on a flat fee per service pay scale now (anywhere from 20-35%) and would move to possible 65-70% as an IC, but obviously have to supply everything. I do like being more in control of what products I can use, what services I offer, etc. Not so sure about having to worry about bringing sheets and towels and doing all the laundry at home. I'd love some advice, experiences others have had, etc. I have to make a decision by the end of next week.

I have already called the skin care line I want to transition to, and there is no minimum order, so that would help make it easier to get stocked.

Thanks!

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Permalink Reply by Mary c Carter on December 15, 2012 at 9:50pm

Obamacare sucks our jobs

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Permalink Reply by Jodi on December 19, 2012 at 7:26am

Is there any software that anyone knows of that can help track all the expenses, or is it just as easy to keep an Excel spreadsheet?

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Permalink Reply by Terra Dolce on December 19, 2012 at 7:49am

I actually studied tax law before partnering with my wife to get into the personal care products industry:

The obvious cons are that you will be getting a 1099 and will have no employer income tax withholding. Furthermore, the health insurance issue, but make sure they keep up on OSHA protection because there is a fair difference between employees and ICs... I'm not too familiar with that area of law. Everyone thinks of tax and health insurance, but there are a plethora of workplace liability issues that can end up falling on an independent contractor.

Depending on the type of equipment you have to purchase, you can write-off or depreciate it over its useful life. I would err against using H&R Block and actually download the IRS forms off of the government website - they have instructions (I know its long), but if you spend the time preparing your return, you will minimize any type of liability.

I would make sure that any liability on promotions such as gift cards, discounts, etc. at your place of work are the burden of the employer and establish an hour rate. Hire a contract attorney to review anything before you sign it. A small fee up front could protect you down the road. Don't they realize there are real quality control issues if customers knew or saw that you were bringing in stuff from home? (I'm sure you keep a really neat home)

Hope this helps.

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Permalink Reply by Jodi on December 19, 2012 at 8:09am

Thanks. Sounds like a lot of trouble. I hope it doesn't come to that, I really don't want to do it. And yes, never even thought of that, I have cats and they have fur. If someone is allergic, even 1 stray hair could cause issues I would guess. I don't understand why we can't keep the washer/dryer and just split the cost of water, detergent, etc. But it's not my call.