Let’s face it; dealing with all of the paperwork that comes along with hiring people can be a drag. This is especially true if you are a small company and can’t afford to hire someone who can tell you all about the ins and outs of compliance, tax code, and even 401k structure. Sometimes, this may mean you let something slide here and there—after all, that’s a lot for just one person to handle.
While paperwork and managing payroll for even a handful of employees is stressful and, might we say, annoying, you still have to keep your ducks in a row if you want to stay in business. Here are a few things you should avoid if you don’t want to deal with even bigger employee problems later.
Contractors are Contractors; Employees are Employees
The tax responsibilities for independent contractors are much different than they are for those who are actual employees of your company. You might treat them the same when it comes to deadlines and respect, but when it comes to taxes, those two groups of people are very different. Misclassifying workers can mean you’re in for additional taxes, penalties, and a bit of trouble from the IRS. If you’ve paid someone more than $600 over the course of a single year, you have to file a 1099 for them. You can visit the IRS website for more information.
Pay Your Overtime Properly
Overtime rules are exceedingly complicated, and consulting an expert on how to pay it will only benefit you. Of course, there’s a benefit to learning how to pay your overtime correctly—you won’t get roasted for mistakes later. If you do mess it up, you can owe big time for mistakes, including fines and compensation insurance for employees. Despite the rules looking difficult, in most cases, reading them and understanding the basics will get you a long way. While you’re at it, make sure you know which of your employees are salaried and which are not—there are different rules for each.
Legally Hire Your Interns
Does your nephew want to work for you for the summer? Or are you just looking for an extra hand during the busy weeks? Either way, you need to make sure you hire your interns legally. Lately, there’s been a huge fuss over intern abuse at more than one major company, so if you’re not compliant (or not sure you are), now’s a great time to check. Even if you aren’t paying someone (or you aren’t paying them very much), the FSLA still says they have rights. If you ignore those rights, you’re begging for some issues to happen.
While it’s likely that you have everything organized when it comes to your employees, it never hurts to look over the rules again. A simple yearly review for changes can save you headaches and dollars later on when someone calls you on something your company did ten years ago.
Published By : Earl Foote On: 3rd October, 2015