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Independent Contractors

Clayton Makepeace, Troy White and Outsourcing

By Internet Lawyer

employees outsourcingTroy White has posted at copywriter Clayton Makepeace’s site some good information about outsourcing to grow your business quickly. Let me weigh in on some of the legal issues.

As a preliminary matter, you should be very careful to distinguish between hiring employees and outsourcing to independent contractors. Many business owners who are non-lawyers will refer to “hiring” an independent contractor. That’s a mistake. If you’re going to outsource to an independent contractor, nothing you say or put in writing should suggest that the person doing the work on a freelance basis is actually an employee.

From a taxes and benefits standpoint, employees are a costly pain in the @ss. Unless you want to be responsible for Social Security contributions, workers compensation, and unemployment compensation, don’t hire employees.

In contrast, independent contractors are generally responsible for all of their own taxes (caveat – there may Read More

Virtual Assistants Can Be a Pain in the Ass

By Internet Lawyer

Outsourcing work to virtual assistants has become popular among Internet marketers. And if the assistant is both intelligent and has integrity, it can be a win-win deal. If either characteristic is missing, it is better to do the work yourself.

Let me give you an example.

Mack (not his real name) contacted me looking for work. A college student, he wanted to earn some extra income. I outsourced work to Mack on a project as an independent contractor. He had the intelligence, needed the money, and he knew that it would be detrimental to him among a group which we were both affiliated with if he didn’t deliver as promised.

http://youtube.com/watch?v=auDeKKfkFJE

Yet it became theater of the absurd to try to get Mack to deliver. If he had been an employee, I’d have fired him by the third day.

First excuse was that clarification was needed as to what was agreed upon in writing.

Second, he was “busy” but promised me that performance was just around the corner.

Third, a six-hour loss of electricity apparently justified no performance over several additional days…and BTW, he didn’t want to be “micromanaged.” Apparently inquiring about his total lack of performance constituted micromanagement. The things they must teach in college business courses these days.

Fourth, yet another “busy” excuse but assurances of quick turnaround with the work. When his new self-imposed deadline came and went without a word, I yanked the work and will reassign it.

The fifth and final excuse was that his summer school algebra course made it too difficult to perform, that he was “sorry,” and guessed that his behavior had affected his “credibility.” Really? Imagine that.

The next day, Mack “no-showed,” dropping the ball on his obligation to the common group of which we’re both members. He apparently used the algebra class as the excuse for not keeping his word to the group.

The sad thing is, Mack has no clue how bad he’s hurt his reputation. All agree that he’s bright. Yet he’s shown a fatal character flaw that renders him unfit to be recommended for any type of job. I’ve got several clients looking for a good virtual assistant. Mack would have had all the work that he needed to pay for his college education if he had simply performed. It wasn’t rocket science.

They say that it’s never too late to do the right thing.

I disagree.

Mack has irreparably burned bridges that can never be rebuilt. I want no part of doing business with someone who lacks integrity.

Now, I do outsource work to virtual assistants who perform. But they are honest. Therein lies the difference.

Some will wonder how a lawyer could have a problem like this. It isn’t a legal issue. The independent contractor agreement was in place, and Mack’s background only showed red flags with 20-20 hindsight. It was a business judgment call…and unfortunately, that call sometimes has to be made without knowing character or lack thereof.

In retrospect, what were the red flags?

First, Mack’s personal appearance was poor even for a college kid. As my great grandmother used to say (having raised five kids in the Great Depression), no matter how poor you are, you can always afford soap, water, and keep your clothes looking their best. Second, Mack always made it a point to talk big about morality. A philosophical “big hat, no cattle.” When someone makes it a point to emphasize how moral or religious they are, I grab my wallet to make sure it isn’t missing. Those who have these characteristics don’t need to tell you that they do…behavior demonstrates it.

I consider this experience with Mack a valuable lesson learned. I hope that you’re able to learn from the experience too so that Mack’s loss can be your gain.

Outsourcing: Why You Should Use Work-For-Hire Agreements In Your Business

By Internet Lawyer

If you’re outsourcing work, instead of doing it yourself or having an employee do it, you should consider using a work-for-hire contract to protect your legal rights.

If you’re doing work as an independent contractor, a written work-for-hire agreement sometimes is the only thing that ensures you get paid for your efforts…and it reduces your client relations headaches by setting out the specifics of your deal so there is less confusion.

I’ve created a system for outsourcing work to independent contractors. To learn more, check out the InstaSourcing System now.