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  • Hiring Question - NC North Carolina

    Hello All,

    I am almost ready to launch my new business which is an advertising magazine. I planned to start this on the side while maintaining my full time job. The issue I have run into is the amount of hours I have had to put into my full time job as of late has left me without the time to go out and get advertisers.

    I have almost depleted the small startup fund I had saved but need to hire someone to help me get the advertisers. Could someone point me in the right direction on where I could find more information on hiring someone on salary plus bonus based on a certain amount of ads sold (our bringing them on as a sub contractee?)

    They would essentially be paid only if they could fill a certain quota of ads.

    If this is possible, I assume Id need a lawyer to draw up a contract as well.

    Any help on this would be greatly appreciated!!!

  • #2
    If this is possible, I assume Id need a lawyer to draw up a contract as well.

    Good thinking. It sounds like this position would qualify as an independent contractor, which will make your life as an "employer" much easier. This individual would be a vendor of services to your small company as opposed to an employee.

    I suggest you do some on-line reasearch on what the required legal standards are to hire someone as an IC rather than an employee. You should be able to find lots of info on-line and you should also discuss this with the attorney.

    As to what to pay this person, frankly I have no idea. If you know others who have a similar enterprise, you can always ask them what the going rate is for this type of position.

    Comment


    • #3
      Take a very hard look at the following.
      http://www.dol.gov/whd/regs/complian...tsidesales.htm

      Not your question, but a "contract" does not necessarily get you anything positive. Contract law never overrides labor law, meaning that you will still be fully liable for all labor law obligations no matter what the contract says. Whether or not your business venture makes sense is a different issue. It might not. But if all you are trying to do is scratch this one itch, then arguably your solution is to hire a single "at will" employee and make certain that this employee entirely follows the rules I just cited. Failure to do so risks minimum wage and overtime claims. Past that, becoming an employer raises IRS and NC tax and reporting issues, but that is true whether or not a contract is involved. The contract increases obligations, not decreases them.

      Now if you are using the word "contract" to imply a worker that is not an employee, but rather an independent contractor, then you are basically claiming that this is some arm's length vendor who existed as a vendor prior to you meeting them, and who will continue to exist as an arm's length vendor after you no longer needing them. This is a matter of statutory law, not contract law. The contract cannot create anything that did not already exist. Since contracts can never override labor law, the worker will eventually file for UI, causing NC to review any claim that the worker was not an employee. If NC decides the worker was really an employee after all. they will do so retroactively. Or they could file a form SS-8 with IRS, forcing IRS to review their status. Fun times.
      http://www.dol.gov/whd/regs/compliance/whdfs13.pdf
      http://www.irs.gov/businesses/small/...=99921,00.html
      "Reality is that which, when you stop believing in it, doesn't go away".
      Philip K. **** (1928-1982)

      Comment


      • #4
        Thank you both for the answers.

        From what I can tell by the info you provided DAW, it seems that hiring an employee to sell ads would fall under the “Outside Sales Exemption”

        To qualify for the outside sales employee exemption, all of the following tests must be met: The employee’s primary duty must be making sales (as defined in the FLSA), or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and

        The employee must be customarily and regularly engaged away from the employer’s place or places of business.

        The salary requirements of the regulation do not apply to the outside sales exemption. An employee who does not satisfy the requirements of the outside sales exemption may still qualify as an exempt employee under one of the other exemptions allowed by Section 13(a)(1) of the FLSA and the Part 541 regulations if all the criteria for the exemption is met.

        What I am having trouble understanding is if the minimum salary of $455/week still counts due to this statement:

        “The salary requirements of the regulation do not apply to the outside sales exemption. An employee who does not satisfy the requirements of the outside sales exemption may still qualify as an exempt employee under one of the other exemptions allowed by Section 13(a)(1) of the FLSA and the Part 541 regulations if all the criteria for the exemption is met.”

        Comment


        • #5
          The "default" in labor law is that all employees are paid minimum wage and overtime. This is a function of the federal FLSA law. There are something like 100 or so exception in FLSA to MW, OT or both. The so-called "salaried basis" requirement is associated with the Administrative, Executive, Professional and IT Professional exceptions only. It is not associated with the Outside Sales exceptions. It is not associated with the rest of the FLSA exceptions. The only way "salaried basis" ever comes into play is IF the employer is trying to argue that one of these other exceptions is in play, and based on what you have said, I cannot see why you would want to claim that.
          http://www.dol.gov/whd/regs/compliance/fairpay/main.htm

          Any employee can be "non-exempt" (MW/OT required). No employee can be Exempt under any of the exceptions unless the employer wishes to support the specific exception. Based on what you have actually said, the Outside Sales exception (and only that exception) makes sense for your situation.

          So if you fail to follow the Outside Sales exception requirements to the letter, the risk is not that the "salary basis" requirements will somehow kick in (they will not), but rather that the OT/MW wage requirements will kick in.

          -------

          Not your question, but the whole "independent contractor" vs. "employee" issue would imply you claiming the worker was not an employee based on objective third party criteria (cited earlier) unrelated to whatever your wishes are. The notion that the contract or some decision the employer makes is sort of like saying that your cat can be turned into a dog by writing something on a piece of paper. In legalese, "Res ipsa loquitur" (the thing speaks for it's self).
          "Reality is that which, when you stop believing in it, doesn't go away".
          Philip K. **** (1928-1982)

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