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  • Contract vs. Employee Nevada

    Hi I have a question about Contract vs Employee.

    I applied for and have been interviewing for a remote director of marketing role for a US based Tech company. Its a brand new role with the company and is responsible for setting up all marketing and sales process and strategy then managing and executing the strategies.

    After 4 interview the CEO said that the role would start off on a contract basis so we could all ensure it was a good fit.

    I had to hire contract employees in a previous role and understand that you can't just classify a role however you want - that there arer criteria outlined in employment law.

    After reviewing the criteria - i don't think myself or the position i applied for qualify to be classified as a contract position/independent contractor. the company is small and I know these classifications were only enacted in 2014 and some smaller companies without full time HR professionals are a bit out of the loop.

    But am i correct in being worried about being miss-classified? I really don't feel good about starting my relationship with this company in a legal grey zone.

    Also - is there nothing in a FT employment law that provides a 'kick the tires' period where you can terminate without cause?

    hope someone can help

  • #2
    I don't know enough about the position to know if you're worrying with cause or for nothing. But it's not uncommon for a position to start in sort of a temp-to-perm situation, with both sides trying each other out to see how they fit. Usually that's done through a temp or staffing agency, but the CEO's words sound as if that's what he is considering.

    In 49 out of 50 states and sometimes in the 50th, any employee, full time, part time, exempt, non-exempt, whatever, can be fired at any time for any reason except one expressly prohibited by law. This includes no reason. Google, at-will employment.
    The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.

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    • #3
      Originally posted by cbg View Post
      I don't know enough about the position to know if you're worrying with cause or for nothing. But it's not uncommon for a position to start in sort of a temp-to-perm situation, with both sides trying each other out to see how they fit. Usually that's done through a temp or staffing agency, but the CEO's words sound as if that's what he is considering.


      In 49 out of 50 states and sometimes in the 50th, any employee, full time, part time, exempt, non-exempt, whatever, can be fired at any time for any reason except one expressly prohibited by law. This includes no reason. Google, at-will employment.
      The position is a product marketing and sales director and Nd it's the first of its kind with the company...there is a ton of work to do as I would be setting up a lot of process and systems in the first few months. I would be hiring my team
      And hiring 3rd party vendors as well... he doesn't want to hire me through an agency, he wants to hire me for a trial as an independent contractor and for the work I'd be doing it doesn't make sense to me... especially if he can fire me without cause if he doesn't feel I'm a fit. I don't have any other clients, they will be setting the rates, and I would need to fly out to different offices and cover the expense as contract employees have to bill for T&E vs file for expenses correct? I just don't understand based on the dol's contractor vs employee criteria how this is on the level?

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      • #4
        Even if he hired you as an employee he can still fire you without “good cause”. If you’re not a good fit that reason is legitimate in an at will relationship. Of course a contract could also protect you with some type of severance clause.

        I do agree you should be hired as an employee or thru an agency- only you can decide if you want to work for someone who is skirting gray areas.
        Last edited by hr for me; 12-16-2017, 04:03 PM.

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        • #5
          If he is hiring you as an independent contractor versus an employee, you will be responsible for paying both halves of the social security and medicare taxes. When you are an employee, employee pays half and employer pays half.

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          • #6
            I wonder when the CEO says that if he means he is going to hire you through a temp service first.

            Comment


            • #7
              You need to clarify what he means by contract because people throw that term around to describe a lot of different things, some legal some not.

              If he simply means that there is a trial period during which he can fire you for any reason, he actually can do that anyway, at any time, whether he calls you an employee, a contractor, or the man in the moon.

              If he means that you will be actually work through a staffing agency or something like that, before being hired as an employee with them, also, perfectly legal.

              If he means he intends to pay you as an independent contractor, without withholding taxes and issuing you a 1099 instead of a W-2, and then make you an employee later, no that's very illegal.

              Comment


              • #8
                Originally posted by NorthernGal View Post
                Hi I have a question about Contract vs Employee.

                I applied for and have been interviewing for a remote director of marketing role for a US based Tech company. Its a brand new role with the company and is responsible for setting up all marketing and sales process and strategy then managing and executing the strategies.

                After 4 interview the CEO said that the role would start off on a contract basis so we could all ensure it was a good fit.

                I had to hire contract employees in a previous role and understand that you can't just classify a role however you want - that there arer criteria outlined in employment law.

                After reviewing the criteria - i don't think myself or the position i applied for qualify to be classified as a contract position/independent contractor. the company is small and I know these classifications were only enacted in 2014 and some smaller companies without full time HR professionals are a bit out of the loop.

                But am i correct in being worried about being miss-classified? I really don't feel good about starting my relationship with this company in a legal grey zone.

                Also - is there nothing in a FT employment law that provides a 'kick the tires' period where you can terminate without cause?

                hope someone can help
                It’s important to understand the difference between an independent contractor and an employee when making new hires. Classifying someone as an independent contractor allows the business owner to avoid providing benefits and paying certain taxes, but misclassifying a worker as an independent contractor instead of an employee can result in hefty state and federal penalties and leave your business vulnerable to potentially costly lawsuits.

                Unfortunately, there’s no single test to determine whether a worker is an employee or an independent contractor. Each state may have a different definition or test to determine worker classification, but generally, regulators examine the amount of control the worker has over the manner and means of performing his or her duties. The U.S. Department of Labor Wage and Hour Division has set forth its own standards concerning employment relationships under the Fair Labor Standards Act (FLSA).

                On a side note, the IRS uses its own guidelines to classify workers for federal tax purposes, which is separate from the tests assessed by state and federal governments. However, both employers and employees can submit an SS-8 Form to request a “worker status” determination by the agency.

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